<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 8
Portfolio of Investments 9
Statements of Assets and Liabilities 28
Statements of Operations 29
Statements of Changes in Net Assets 30
Notes to Financial Statements 33
Financial Highlights 37
</TABLE>
[PHOTO]
Dear Investor:
Financial professionals continue to be amazed by the almost paradoxical US
economy. We've enjoyed years of consistent expansion and a declining level of
unemployment without definitive signs of higher inflation. In fact, by most
measures, price inflation has been steadily declining. Business productivity
has been increasing, boosting profit margins and earnings. These remarkable
conditions have helped fuel another leg in the long bull market. Stock price
gains have been supported all along by a long-term rally in the bond market.
It's easy to drift away from your long-term investment goals during roaring
markets. For that reason, we've been encouraging investors thrilled with the
market's recent returns to submit to an occasional reality check and make
sure their performance expectations are inline with historical norms. While
that's always sound advice, it should not cause you to believe that our
long-term forecast is anything less than optimistic.
Our positive outlook is based on two fundamental waves of change that will
continue to reshape the investment landscape. First, we believe the 20th
century inflation wave has crested and is now receding, a development that is
leading to greater price equilibrium on a global scale. This allows
investors, businesses and consumers to make more certain plans for the
future, reducing uncertainty and boosting confidence. Second, baby boomers'
demand for investment products will continue to grow as this generation
approaches retirement, leading to continued strong flows of money into the
stock market and increased investment in our bond markets. Strong demand from
investors during this time of shrinking supply of available stocks and bonds
fundamentally supports securities prices and helps cushion downturns when
they occur.
Looking to the shorter-term outlook, it is likely that we will continue to
experience a high degree of volatility in the US and global stock and bond
markets. Continued uncertainty over the impact of the Asian economic crisis
means that investors may tend to be more skittish than usual. But, for
informed and patient investors, today's stock and bond markets still offer
tremendous long term potential. We appreciate your investment in Calvert
Group.
Sincerely,
/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President and CEO
February 5, 1998
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 1
<PAGE>
MONEY MARKET
PORTFOLIO STATISTICS
DECEMBER 31, 1997
ANNUALIZED TOTAL RETURNS
<TABLE>
<CAPTION>
6 MONTHS ENDED
6/30/97 12/31/97
- -----------------------------------------------------------------
<S> <C> <C>
Class O 3.32% 3.42%
Lipper Tax-Exempt Money Market
Funds Average 2.79% 3.08%
</TABLE>
WEIGHTED AVERAGE MATURITY
<TABLE>
<CAPTION>
6/30/97 12/31/97
- -----------------------------------------------------------------
<S> <C> <C>
54 days 50 days
</TABLE>
CREDIT QUALITY DISTRIBUTION
[CHART]
<TABLE>
<S> <C>
First Tier 93%
Second Tier 7%
</TABLE>
ALL SECURITIES IN CALVERT GROUP MONEY MARKET FUNDS ARE ELIGIBLE SECURITIES
UNDER RULE 2a-7 OF THE INVESTMENT COMPANY ACT OF 1940. FIRST TIER SECURITIES
ARE ELIGIBLE SECURITIES RATED IN THE HIGHEST RATING CATEGORY FOR SHORT-TERM
DEBT OBLIGATIONS BY AT LEAST TWO OF THE NATIONALLY RECOGNIZED STATISTICAL
RATINGS ORGANIZATIONS. SECOND TIER SECURITIES ARE ELIGIBLE SECURITIES NOT IN
THE FIRST TIER.
*CLASS O RANKED 10 OUT OF 136 FUNDS.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
[PHOTO]
A DISCUSSION WITH PORTFOLIO MANAGER, TOM DAILEY
HOW WOULD YOU CHARACTERIZE THE INVESTMENT CLIMATE OVER THE PAST 12 MONTHS?
Short-term rates trended higher early in the year on expectations that the
Federal Reserve would take steps to tighten monetary policy and slow the pace
of economic growth. In March, the Fed raised its target rate for the federal
funds rate, the rate banks charge each other for overnight loans to meet
reserve requirements, by 25 basis points, but then took no further action.
Short-term securities reversed course and yields trended downward for the
remainder of the year.
WHAT WAS YOUR STRATEGY FOR MANAGING THE MONEY MARKET PORTFOLIO, AND HOW DID
THE PORTFOLIO COMPARE TO THE LIPPER AVERAGE?
The Money Market Portfolio's 12-month total return was 30 basis points above
the return for the Lipper Tax-Exempt Money Market Funds Average, placing it
in the top ten percent of the category.*
At the end of the first quarter, we took steps to shorten the Portfolio's
average maturity to approximately 30 days to be better positioned to take
advantage of the large issuance of notes occurring over the summer months.
This increase in supply generally means higher yields for investors. During
the third quarter, we lengthened average maturity to approximately 60 days as
it appeared that the Fed would not move rates. We were pleased to have locked
in the higher rates for a longer period of time, as the Asian currency crisis
created increased demand for money market securities and caused yields to
trend lower.
2 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
MONEY MARKET
PORTFOLIO STATISTICS
DECEMBER 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
AS OF 12/31/97
- -----------------------------------------------------------
<S> <C>
One year 3.38%
Five year 3.19%
Ten year 4.18%
Since inception 4.86%
(3/4/81)
</TABLE>
LONG-TERM PERFORMANCE
CHANGE IN VALUE OF $10,000 INVESTMENT.
Line graph here showing comparison from 1/1/88 to 12/31/97.
CTFR Money Market Portfolio $15,061
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS.
AVERAGE ANNUAL TOTAL RETURNS AND LONG-TERM PERFORMANCE ARE SHOWN FOR CLASS O.
CLASS I SHARES WOULD BE DIFFERENT.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
WHAT DEVELOPMENTS DO YOU SEE AHEAD FOR THE CASH MARKETS?
Continued low inflation despite strong economic growth and real wage gains
kept the Fed on hold for the balance of 1997. Looking forward, the Asian
financial crisis may influence US monetary policy, as the Fed considers how a
rate change will impact jittery global economies.
The Fed continues to weigh its concerns for tight labor markets and the
impact rising wages could have on the economy against reports indicating that
inflation does not look to be much of a threat. Thus, money market rates
should remain relatively stable.
January 22, 1998
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 3
<PAGE>
LIMITED-TERM
PORTFOLIO STATISTICS
DECEMBER 31, 1997
INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
6 MONTHS 12 MONTHS
- ------------------------------------------------------------------------
<S> <C> <C>
Limited-Term 2.04% 4.07%
Lehman Municipal Bond Index TR 5.81% 9.19%
Lipper Short Municipal Debt
Funds Average 2.59% 4.63%
</TABLE>
WEIGHTED AVERAGE MATURITY
<TABLE>
<CAPTION>
6/30/97 12/31/97
- ------------------------------------------------------------------------
<S> <C> <C>
352 days 327 days
</TABLE>
SEC YIELDS
<TABLE>
<CAPTION>
30 DAYS ENDED
6/30/97 12/31/97
- ------------------------------------------------------------------------
<S> <C> <C>
3.90% 3.54%
</TABLE>
CREDIT QUALITY DISTRIBUTION
[CHART]
<TABLE>
<S> <C>
A 16%
AA 14%
AAA 19%
BBB 23%
CASH EQUIVALENTS 28%
</TABLE>
INVESTMENT PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ANY FRONT-END SALES
CHARGE.
TR REPRESENTS TOTAL RETURN.
YIELDS ASSUME REINVESTMENT OF DIVIDENDS.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
[PHOTO]
A DISCUSSION WITH CHIEF INVESTMENT OFFICER, RENO MARTINI
DESCRIBE MARKET CONDITIONS DURING THIS PAST YEAR.
Rising wages and low unemployment put the Fed on guard against inflation, but
pricing pressures did not appear to be building. As a pre-emptive move, the
Fed nudged its target rate for the federal funds rate, the rate banks charge
each other for overnight loans to meet reserve requirements, one quarter of a
percentage point higher in March.
In general, short- and long-term interest rates rose during the first
quarter, then trended lower for the remainder of the year.
WHAT WAS YOUR STRATEGY FOR THE LIMITED-TERM PORTFOLIO AND HOW DID IT AFFECT
PERFORMANCE?
During this period, we kept the average maturity near the one year level,
compared to the other funds in our Lipper category whose average maturities
tend to be closer to three years and the Lehman Municipal Bond Index whose
maturity averages 20 years. The Portfolio's short maturity provides a risk
adverse investor minimal volatility, extremely efficient tax management and
competitive total return.
The net asset value remained steady over the 12-month period fluctuating only
.7%, between $10.65 and $10.73.
In order to boost return, we invested about 10% of Portfolio's assets in
short-term securities with very high credit qualities, then took advantage of
opportunities to sell those at a profit once they became eligible for
inclusion in money market portfolios.
4 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
LIMITED-TERM
PORTFOLIO STATISTICS
DECEMBER 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
AS OF 12/31/97
- ------------------------------------------------------------------------
<S> <C>
One year 3.01%
Five year 3.73%
Ten year 5.04%
Since inception 6.14%
(3/4/81)
</TABLE>
PERFORMANCE COMPARISON
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT.
Line graph here showing comparison from 1/1/88 to 12/31/97.
CTFR Limited-Term Portfolio $16,354
Lehman Municipal Bond Index TR $22,788
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 1.00%. NO SALES CHARGE HAS BEEN
APPLIED TO THE INDICES USED FOR COMPARISON.
THE LEHMAN MUNICIPAL BOND INDEX HAS A MATURITY OF APPROXIMATELY 20 YEARS,
WHICH IS MUCH LONGER THAN THAT OF THE LIMITED-TERM PORTFOLIO.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
WHAT DEVELOPMENTS DO YOU SEE AHEAD FOR THE FIXED-INCOME MARKETS?
Investors and the Fed will continue to weigh concerns for tight labor markets
and the impact rising wages could have on the economy against reports
indicating that inflation does not look to be much of a threat.
We don't expect the Fed will take steps to tighten monetary policy during
this "wait-and-see" stage. Thus, our near-term outlook is for relatively
stable short-term rates and our long-term outlook is slightly bullish.
January 22, 1998
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 5
<PAGE>
LONG-TERM
PORTFOLIO STATISTICS
DECEMBER 31, 1997
INVESTMENT PERFORMANCE
<TABLE>
<CAPTION>
6 Months 12 Months
-------- ---------
<S> <C> <C>
Long-Term 5.85% 8.41%
Lehman Municipal
Bond Index TR 5.81% 9.19%
Lipper General Municipal Debt
Funds Average 5.95% 9.11%
</TABLE>
WEIGHTED AVERAGE MATURITY
<TABLE>
<CAPTION>
6/30/97 12/31/97
------- --------
<S> <C> <C>
16 years 16 years
</TABLE>
SEC YIELDS
<TABLE>
<CAPTION>
30 Days Ended
6/30/97 12/31/97
------- --------
<S> <C> <C>
4.56% 4.17%
</TABLE>
CREDIT QUALITY DISTRIBUTION
[CHART]
<TABLE>
<S> <C>
A 14%
CASH EQUIVALENTS 6%
AAA 52%
BBB 11%
AA 17%
</TABLE>
INVESTMENT PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ANY FRONT-END SALES
CHARGE.
TR REPRESENTS TOTAL RETURN.
YIELDS ASSUME REINVESTMENT OF DIVIDENDS.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
A DISCUSSION WITH CHIEF INVESTMENT OFFICER, RENO MARTINI
[PHOTO]
DESCRIBE THE INVESTMENT CLIMATE DURING THE PAST YEAR.
The economy continued to expand and inflation remained tame, despite rising
wages and low unemployment. While this can be favorable, it caused confusion
because historically inflation accompanies a rapidly expanding economy and/or
rising wages. In general, both short- and long-term interest rates rose until
March when the Federal Reserve raised the fed funds rate. This is the rate
banks charge each other for overnight loans to meet reserve requirements.
Mixed economic indicators combined with the market's slow acceptance of no
visible inflationary pressures caused rate volatility until mid-year. Rates
trended lower throughout the rest of the year, especially long-term rates
which closed near the lows of November of 1993. By year-end the yield curve
was relatively flat.
The yield curve is a graph showing the relationship between bond yields and
maturities. It's usually positively sloped, indicating that higher yields are
paid on longer-term securities. A flat yield curve can suggest that investors
are not overly concerned about rising inflation.
COMMENT ON PERFORMANCE AND DESCRIBE YOUR MANAGEMENT APPROACH FOR THE
LONG-TERM PORTFOLIO.
Going into 1997, our forecast called for additional Fed tightening and a
corresponding rise in interest rates. Accordingly, we took steps to keep the
Fund's duration which, like maturity, is a measure of the portfolio's
interest rate sensitivity, near the short end of our target range. The Fed
did tighten monetary policy in March, but then took no further action.
6 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
LONG-TERM
PORTFOLIO STATISTICS
DECEMBER 31, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
AS OF 12/31/97
--------------
<S> <C>
One year 4.38%
Five year 6.11%
Ten year 7.46%
Since inception 8.17%
(8/23/83)
</TABLE>
PERFORMANCE COMPARISON
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
[GRAPH]
Line graph here showing comparison from 1/1/88 to 12/31/97.
- -- CTFR LONG-TERM PORTFOLIO - $20,535
- -- LEHMAN MUNICIPAL BOND INDEX TR - $22,788
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 3.75%. NO SALES CHARGE HAS BEEN
APPLIED TO THE INDICES USED FOR COMPARISON.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
For the year, the Portfolio lagged its Lipper average by 78 basis points.
This was due to our more conservative strategy, which was in place much of
the first two quarters when we believed rates would go higher.
We had reason to adopt a more bullish outlook and a less cautious stance in
the second half of the year, as we saw no buildup in pricing pressures making
it less likely the Fed would tighten monetary policy. Beginning around
mid-year, we took steps to lengthen the Portfolio's duration from roughly
seven years in January to about eight years in August. Our opinion was that
the economy was slowing down and we expected lower interest rates.
WHAT'S YOUR OUTLOOK FOR THE BOND MARKET?
We remain bullish on the bond market. We expect economic activity to be
moderate and inflation to remain in check. Without the threat of inflation,
interest rates should remain low. And, because most measures of inflation
remain low, any action by the Fed is likely to be modest. However, we expect
the Fed to delay any action until the consequences of the Asian financial
crisis become clear.
Long duration bonds were one of the best performing sectors last year and we
believe that 1998 should be similar.
January 22, 1998
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of Calvert Tax-Free Reserves:
We have audited the accompanying statements of assets and liabilities of
Calvert Tax-Free Reserves Money Market, Limited-Term, and Long-Term
Portfolios (three portfolios comprising Calvert Tax-Free Reserves) including
the portfolio of investments as of December 31, 1997, and the related
statements of operations for the year then ended, statements of changes in
net assets for each of the two years in the period then ended and financial
highlights for each of the four years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial highlights for the year ended December 31, 1997 were audited by
other auditors whose report dated January 31, 1993 expressed an unqualified
opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments owned as of December 31, 1997, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
each of the Portfolios noted in the first paragraph as of December 31, 1997,
the results of their operations, the changes in their net assets and
financial highlights for the respective periods stated in the first
paragraph, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
8 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 100.4% AMOUNT VALUE
- ------------------------------ ---------- -----
<S> <C> <C>
ALABAMA - 3.5%
Athens IDA Revenue VRDN, 4.50%, 6/1/05, LOC:
Tokai Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,900,000 $2,900,000
Birmingham Airport Authority Revenue Municipal Trust Receipts,
3.80%, 7/1/26, MBIA Insured. . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,000,000
Haleyville IDA Revenue VRDN, 4.40%, 11/1/04,
LOC: Columbus Bank & Trust . . . . . . . . . . . . . . . . . . . . . . 2,170,000 2,170,000
Mobile Spring Hill Medical Clinic Revenue VRDN, 4.25%,
2/1/11, LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . 3,600,000 3,600,000
Northpoint MFH Revenue VRDN,
4.35%, 9/3/15, LOC: Amsouth Bank . . . . . . . . . . . . . . . . . . . 2,170,000 2,170,000
4.25%, 7/1/18, LOC: Amsouth Bank . . . . . . . . . . . . . . . . . . . 5,690,000 5,690,000
Pell City IDA Revenue VRDN, 4.45%, 11/1/05,
LOC: Key Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970,000 1,970,000
Prattville IDA Revenue VRDN, 4.35%, 3/1/26,
LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,640,000 2,640,000
Selma IDA Revenue VRDN, 4.35%, 11/1/09,
LOC: Wachovia Bank & Trust . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
State IDA Revenue VRDN, 4.45%, 11/1/14,
LOC: Southtrust Bank, AL . . . . . . . . . . . . . . . . . . . . . . . 6,675,000 6,675,000
State MFH Revenue VRDN,
4.30%, 9/1/20, LOC: Southtrust Bank, AL. . . . . . . . . . . . . . . . 3,090,000 3,090,000
4.25%, 12/1/03, LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . 3,365,000 3,365,000
Series A, 4.25%, 4/1/14, LOC: Southtrust Bank, AL. . . . . . . . . . . 805,000 805,000
Wynlakes Government Utility Authority Revenue VRDN,
4.25%, 5/1/06, LOC: Amsouth Bank . . . . . . . . . . . . . . . . . . . 3,800,000 3,800,000
ARIZONA - 2.7%
Apache County IDA Revenue VRDN, 3.80%, 12/15/18,
LOC: Bank of New York. . . . . . . . . . . . . . . . . . . . . . . . . 4,520,000 4,520,000
Apache County IDA Revenue VRDN, Series B, 4.05%, 10/1/21,
LOC: Bank of Tokyo-Mitsubishi, Ltd.. . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Glendale IDA Revenue VRDN, 4.45%, 1/1/20, Confirming
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 7,500,000 7,500,000
Maricopa County IDA Revenue VRDN, 4.10%, 10/1/08,
C/LOC: Great American FSB. . . . . . . . . . . . . . . . . . . . . . . 5,415,000 5,415,000
Phoenix IDA Airport Revenue VRDN, 4.40%, 8/1/16,
LOC: Industrial Bank of Japan. . . . . . . . . . . . . . . . . . . . . 5,300,000 5,300,000
Pinal County IDA Revenue VRDN, 4.95%, 12/1/05,
LOC: Industrial Bank of Japan. . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Prescott IDA Revenue VRDN, 4.05%, 12/1/14,
GA: Household Finance Corp.. . . . . . . . . . . . . . . . . . . . . . 8,200,000 8,200,000
ARKANSAS - 0.6%
Arkadelphia IDA Revenue Bonds, 4.40%, 4/1/11,
LOC: Den Danske Bank . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
State Financial Authority Revenue Bonds, 3.85%, 2/2/98,
FSA Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,140,000 4,140,000
</TABLE>
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 9
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ------------------------------ ---------- -----
<S> <C> <C>
CALIFORNIA - 14.2%
California Valleys Housing Financial Authority Revenue VRDN,
Series A, 4.90%, 7/1/25, LOC: Sumitomo Bank, Ltd.. . . . . . . . . . . $8,085,000 $8,085,000
Fresno MFH Revenue VRDN, 4.55%, 5/1/15,
LOC: Tokai Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 8,712,000 8,712,000
Los Angeles County MFH Revenue VRDN, 4.30%, 12/1/15,
Confirming LOC: Sumitomo Bank, Ltd.. . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
Los Angeles County Tax and Revenue Anticipation Notes,
4.50%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,700,000 24,770,586
Marion County MFH Authority Revenue VRDN, 3.40%,
10/15/29, LOC: Dai-Ichi Kangyo Bank, Ltd.. . . . . . . . . . . . . . . 11,900,000 11,900,000
Orange County Apartment Development Revenue VRDN,
4.80%, 3/1/07, LOC: Tokai Bank, Ltd. . . . . . . . . . . . . . . . . . 2,450,000 2,450,000
4.35%, 8/15/07, LOC: Tokai Bank, Ltd.. . . . . . . . . . . . . . . . . 9,000,000 9,000,000
Palmdale School District Project Lease VRDN, 4.30%, 12/13/10,
LOC: National Westminster Bank . . . . . . . . . . . . . . . . . . . . 3,842,857 3,842,857
Redlands Redevelopment Agency Lease Revenue VRDN,
4.60%, 6/1/22, Confirming LOC: Sumitomo Bank, Ltd. . . . . . . . . . . 6,330,000 6,330,000
Series A, 4.60%, 8/1/22, Confirming
LOC: Sumitomo Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . 19,860,000 19,860,000
Riverside County IDA Revenue VRDN, 4.50%, 6/30/98. . . . . . . . . . . . 20,000,000 20,052,121
Riverside MFH Revenue VRDN,
4.85%, 6/1/05, LOC: Tokai Bank, Ltd. . . . . . . . . . . . . . . . . . 3,200,000 3,200,000
4.30%, 6/1/09, LOC: Tokai Bank, Ltd. . . . . . . . . . . . . . . . . . 1,040,000 1,040,000
Sacramento County MFH Revenue VRDN, 4.85%, 12/1/98,
LOC: Tokai Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 5,265,000 5,265,000
San Bernardino County COPs Notes, 4.60%,
3/1/24, LOC: Bank of Tokyo-Mitsubishi, Ltd.. . . . . . . . . . . . . . 745,000 745,000
San Bernardino County MFH Revenue VRDN, 6.05%, 5/1/15,
IA: Escrowed/T-Bills . . . . . . . . . . . . . . . . . . . . . . . . . 28,000,000 28,000,000
San Bernardino County Public Safety Authority Revenue Bonds,
4.50%, 5/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,010,205
San Francisco MFH Revenue VRDN, 4.80%, 10/1/00,
LOC: Mitsubishi T&B. . . . . . . . . . . . . . . . . . . . . . . . . . 28,560,000 28,560,000
Simi Valley MFH Revenue VRDN, 4.65%, 6/1/10, Confirming
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 6,800,000 6,800,000
Union City MFH Revenue VRDN, 4.50%, 10/1/07,
LOC: Credit Lyonnais . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
Victorville MFH Revenue VRDN, 4.30%, 12/1/15,
C/LOC: Redland S&L . . . . . . . . . . . . . . . . . . . . . . . . . . 3,735,000 3,735,000
COLORADO - 2.8%
Arapahoe County MFH Revenue VRDN, 5.40%, 11/1/17,
LOC: Heller Financial. . . . . . . . . . . . . . . . . . . . . . . . . 8,455,000 8,455,000
Central City MFH Revenue VRDN, 4.15%, 12/25/30,
LOC: Texas Commerce Bank . . . . . . . . . . . . . . . . . . . . . . . 3,194,000 3,194,000
City and County of Denver MFH Revenue VRDN, 3.95%,
12/15/14, Confirming LOC: Den Danske Bank. . . . . . . . . . . . . . . 8,500,000 8,500,000
Denver City and County Revenue VRDN, 4.05%, 10/1/18,
FGIC Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,100,000 15,100,000
Fort Collins MFH Revenue VRDN, 4.15%, 11/25/30,
LOC: Texas Commerce Bank . . . . . . . . . . . . . . . . . . . . . . . 3,950,000 3,950,000
</TABLE>
10 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
COLORADO (CONT'D)
Lakewood IDA Revenue VRDN, 4.15%, 8/1/07,
LOC: West One Bank . . . . . . . . . . . . . . . . . . . . . . . . . . $2,070,000 $2,070,000
CONNECTICUT - 0.1%
State Development Authority Revenue VRDN,
3.90%, 6/1/08, LOC: Barclays Bank, Plc.. . . . . . . . . . . . . . . . 1,051,000 1,051,000
State Health and Education Facilities Authority Revenue VRDN,
3.90%, 2/1/09, LOC: Barclays Bank, Plc.. . . . . . . . . . . . . . . . 1,190,000 1,190,000
DELAWARE - 0.8%
State Economic IDA Revenue VRDN, 3.95%, 8/1/29,
LOC: Canadian Imperial Bank. . . . . . . . . . . . . . . . . . . . . . 5,500,000 5,500,000
Sussex County Economic Development Revenue VRDN, 4.20%,
11/1/06, LOC: NationsBank. . . . . . . . . . . . . . . . . . . . . . . 6,000,000 6,000,000
DISTRICT OF COLUMBIA - 6.0%
D.C. Municipal Trust Receipts,
3.95%, 6/1/03, FSA Insured . . . . . . . . . . . . . . . . . . . . . . 5,300,000 5,300,000
3.95%, 7/27/03, AMBAC Insured. . . . . . . . . . . . . . . . . . . . . 10,900,000 10,900,000
3.95%, 6/1/05, MBIA Insured. . . . . . . . . . . . . . . . . . . . . . 7,710,000 7,710,000
D.C. MFH Revenue VRDN, 4.35%, 12/1/05,
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 10,390,000 10,390,000
D.C. Tax and Revenue Anticipation Notes, 4.50%, 9/30/98,
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . . 24,000,000 24,108,322
Metropolitan DC Arpts Authority Bonds, Commercial Paper,
LOC: NationsBank
3.83%, 1/30/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000,000 13,000,000
3.90%, 2/13/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
3.90%, 4/17/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 11,900,000 11,900,000
FLORIDA - 5.9%
Capital Projects Financing Authority Revenue VRDN, Series A,
4.15%, 8/1/17, FSA Insured . . . . . . . . . . . . . . . . . . . . . . 20,000,000 20,000,000
Duval County MFH Revenue VRDN, 4.30%, 6/1/07,
LOC: Household Financial Corp. . . . . . . . . . . . . . . . . . . . . 6,200,000 6,200,000
Escambia County IDA Revenue VRDN, 4.35%, 2/1/17,
LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,500,000
Pinellas County Health Facilities Authority Revenue VRDN,
4.20%, 11/1/15, LOC: First Union Bank, NC. . . . . . . . . . . . . . . 3,955,000 3,955,000
Orange County Health Facilities Authority Revenue VRDN,
3.90%, 10/1/06, MBIA Insured . . . . . . . . . . . . . . . . . . . . . 6,880,000 6,880,000
3.90%, 3/27/06, MBIA Insured . . . . . . . . . . . . . . . . . . . . . 2,600,000 2,600,000
3.90%, 10/1/08, MBIA Insured . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
Palm Beach County IDA Revenue VRDN, 4.415%, 5/5/10,
LOC: Union Bank of California. . . . . . . . . . . . . . . . . . . . . 4,445,000 4,445,000
State Housing Finance Agency Floating Rate Trust Receipts,
3.95%, 7/1/08, LOC: International Neder Verz . . . . . . . . . . . . . 17,820,000 17,820,000
State Housing Finance Agency Revenue VRDN,
4.10%, 12/1/09, SURBD: Continental Casualty Co.. . . . . . . . . . . . 4,315,000 4,315,000
4.35%, 7/1/23, LOC: Heller Financial . . . . . . . . . . . . . . . . . 8,800,000 8,800,000
Volusia County MFH Revenue VRDN, 4.525%, 9/1/05,
LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,730,000 3,730,000
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
GEORGIA - 4.3%
Athens MFH Revenue VRDN, 4.525%, 8/1/05,
LOC: First Bank, N.A.. . . . . . . . . . . . . . . . . . . . . . . . . $2,000,000 $2,000,000
Columbus Downtown Development Authority Revenue VRDN,
4.30%, 8/1/15, LOC: Columbus Bank & Trust. . . . . . . . . . . . . . . 7,800,000 7,800,000
De Kalb County MFH Revenue VRDN, 4.25%, 11/1/15,
LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,470,000 7,470,000
Franklin County Industrial Building Authority Revenue VRDN,
4.60%, 1/1/07, LOC: Comerica Bank. . . . . . . . . . . . . . . . . . . 2,560,000 2,560,000
Fulton County MFH Authority Floating Rate Trust Receipts,
3.95%, 9/1/07, LOC: International Neder Verz . . . . . . . . . . . . . 13,295,000 13,295,000
3.95%, 1/1/08, LOC: International Neder Verz . . . . . . . . . . . . . 14,675,000 14,675,000
Jackson County IDA Revenue VRDN,
3.95%, 12/1/15, LOC: Bank of Tokyo-Mitsubishi, Ltd.. . . . . . . . . . 7,000,000 7,000,000
4.25%, 12/1/24, LOC: Barclays Bank, Plc. . . . . . . . . . . . . . . . 2,545,000 2,545,000
Savannah Economic Development Authority Revenue VRDN,
4.35%, 7/1/27, LOC: NationsBank. . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
HAWAII - 0.7%
State Department Budget and Finance VRDN, 4.80%, 12/1/21,
LOC: Union Bank of California. . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
IDAHO - 0.3%
Twin Falls Industrial Development Corp. Revenue VRDN,
4.50%, 12/1/15, LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . 4,500,000 4,500,000
ILLINOIS - 6.4%
Arlington Heights MFH Revenue VRDN, 4.80%, 5/1/24,
LOC: Heller Financial. . . . . . . . . . . . . . . . . . . . . . . . . 4,230,000 4,230,000
Chicago Municipal Trust Receipts VRDN, 3.90%, 1/1/18,
AMBAC Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
Elgin Industrial Development Revenue VRDN, 4.10%, 9/1/16,
LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,700,000 4,700,000
Fulton IDA Revenue VRDN, 4.00%, 4/1/12,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
Galesburg Knox College Project Revenue VRDN, 4.10%, 3/1/31,
LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
Plainfield IDA Revenue VRDN, 4.10%, 4/1/17,
LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,300,000 5,300,000
Rockford Economic Development Revenue, 4.25%, 12/1/10,
LOC: Banque Paribas. . . . . . . . . . . . . . . . . . . . . . . . . . 2,380,000 2,380,000
State Development Financial Authority Pollution Control Revenue
VRDN, 4.35%, 3/1/17, LOC: Bank of Tokyo-Mitsubishi, Ltd. . . . . . . . 9,400,000 9,400,000
State Educational Facilities Authority Revenue VRDN, 4.30%,
1/1/18, LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . 18,200,000 18,200,000
State Health Facilities Authority Revenue VRDN,
4.40%, 5/15/25, LOC: Fuji Bank, Ltd. . . . . . . . . . . . . . . . . . 5,950,000 5,950,000
4.10%, 4/1/32, LOC: Bank of America. . . . . . . . . . . . . . . . . . 13,400,000 13,400,000
State IDA Revenue VRDN,
4.30%, 11/1/02, LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
4.30%, 9/2/05, LOC: American National Bank & Trust . . . . . . . . . . 600,000 600,000
4.45%, 1/1/09, LOC: Industrial Bank of Japan . . . . . . . . . . . . . 2,000,000 2,000,000
4.10%, 12/1/09, LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Series B, 3.80%, 1/1/10, LOC: National City Bank . . . . . . . . . . . 2,225,000 2,225,000
</TABLE>
12 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ILLINOIS (CONT'D)
State Development Financial Authority Revenue VRDN, 4.05%,
9/1/26, LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . $2,250,000 $2,250,000
State Housing Development Authority Revenue VRDN, 4.40%,
2/1/24, LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . 6,445,000 6,445,000
Winnebago County IDA Revenue VRDN, 6.035%, 12/1/06,
LOC: Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . 2,280,000 2,280,000
INDIANA - 0.9%
Frankfort Economic IDA Revenue VRDN,
Bonds, 4.45%, 1/1/98, LOC: Dai-Ichi Kangyo Bank. . . . . . . . . . . . 1,000,000 1,000,000
VRDN Bonds, 4.05%, 1/1/23, LOC: Dai-Ichi Kangyo Bank . . . . . . . . . 5,400,000 5,400,000
Marion Economic Development Revenue VRDN, 3.90%, 4/1/08,
LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,770,000 2,770,000
South Bend MFH Revenue VRDN, 4.25%, 10/1/09,
LOC: FHLB-INDPLS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
IOWA - 0.3%
Davenport IDA Revenue VRDN, 6.035%, 12/1/06,
LOC: Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . 1,600,000 1,600,000
Scott County IDA Revenue, 4.00%, 3/1/12, LOC: Firstar Bank,
Milwaukee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
KANSAS - 1.5%
Kansas City MFH Revenue VRDN, 4.50%, 6/1/15,
LOC: Huntington National Bank. . . . . . . . . . . . . . . . . . . . . 6,615,000 6,615,000
Shawnee MFH Revenue VRDN, 4.70%, 2/1/24,
LOC: Heller Financial. . . . . . . . . . . . . . . . . . . . . . . . . 11,075,000 11,075,000
State MFH Revenue VRDN, 4.15%, 12/25/30,
LOC: Texas Commerce Bank . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
KENTUCKY - 4.2%
Carroll County Solid Waste IDR Bonds, 4.40%, 5/1/27,
LOC: Banco Bilbao Vizcaya. . . . . . . . . . . . . . . . . . . . . . . 3,951,000 3,951,000
Elizabethtown Industrial Building Revenue VRDN, 4.00%,
10/1/17, LOC: Wachovia Bank & Trust. . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Glasgow IRB VRDN, 5.95%, 6/1/20, Bank of
Tokyo-Mitsubishi, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . 4,100,000 4,100,000
Hancock County IDA Revenue VRDN, 4.25%, 6/1/12,
LOC: Chase Manhattan . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Interlocal School Transportation COPs Notes,
4.09%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000,000 25,003,471
Mayfield Multi-City Lease Revenue VRDN, 3.90%, 7/1/26,
LOC: PNC Bank, NA. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,800,000 9,800,000
Ohio County Pollution Control Revenue VRDN, 4.35%, 10/1/15,
LOC: Chase Manhattan . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 7,000,000
Owensboro IDA Revenue VRDN, 4.35%, 6/1/17,
LOC: LaSalle Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,500,000
State Financial IDA Revenue VRDN, Series B, 3.90%, 2/1/08,
LOC: National City Bank. . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
LOUISIANA - 0.2%
Louisiana Public Facilities Authority Revenue VRDN, 4.00%,
12/1/14, LOC: Regions Bank . . . . . . . . . . . . . . . . . . . . . . 2,880,000 2,880,000
</TABLE>
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 13
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
MAINE - 0.4%
Orrington Resource Recovery Revenue VRDN, 4.275%, 5/1/03,
LOC: Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . $6,400,000 $6,400,000
MARYLAND - 2.6%
Baltimore IDA Revenue VRDN, 4.20%, 8/1/16,
LOC: Dai-Ichi Kangyo Bank. . . . . . . . . . . . . . . . . . . . . . . 22,400,000 22,400,000
Montgomery County Housing Opportunities Revenue VRDN,
3.95%, 6/1/29, LOC: Key Bank . . . . . . . . . . . . . . . . . . . . . 14,800,000 14,800,000
State Economic Development Corporation Revenue VRDN,
4.20%, 6/1/20, LOC: NationsBank. . . . . . . . . . . . . . . . . . . . 500,000 500,000
MASSACHUSETTS - 0.5%
Hudson IDA Revenue VRDN, 4.665%, 10/1/13,
LOC: FNB Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
State Industrial Finance Authority Revenue VRDN,
4.415%, 11/3/99, LOC: FNB Boston . . . . . . . . . . . . . . . . . . . 875,000 875,000
4.665%, 8/1/14, LOC: FNB Boston. . . . . . . . . . . . . . . . . . . . 4,700,000 4,700,000
MICHIGAN - 1.3%
Sault Sainte Marie Tribe Building Revenue VRDN, Series A,
4.33%, 6/1/03, LOC: First of America Bank, MI. . . . . . . . . . . . . 6,225,000 6,225,000
State GO Notes, 4.50%, 9/30/98 . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,010,806
State Hospital Financing Authority Revenue VRDN, Series A,
3.80%, 12/1/23, LOC: First American Bank, MI . . . . . . . . . . . . . 3,600,000 3,600,000
State Strategic Fund Economic Development Revenue VRDN,
4.55%, 9/1/08, LOC: Dai-Ichi Kangyo Bank . . . . . . . . . . . . . . . 6,800,000 6,800,000
MINNESOTA - 0.4%
Cottage Grove Pollution Control Board Revenue VRDN,
4.428%, 8/1/12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
Maple Grove MFH Revenue VRDN, 4.60%, 6/1/26,
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
Mendota Heights MFH Revenue VRDN, 4.60%, 11/1/25,
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 2,355,000 2,355,000
MISSISSIPPI - 0.4%
State Business Financial Corp. IDA Revenue VRDN,
4.45%, 1/1/06, LOC: National Bank of Canada. . . . . . . . . . . . . . 3,675,000 3,675,000
4.05%, 6/1/07, LOC: Deposit Guaranty . . . . . . . . . . . . . . . . . 1,900,000 1,900,000
MISSOURI - 1.6%
Carthage IDA Revenue VRDN, 4.30%, 11/1/10,
LOC: Bank of Tokyo-Mitshubishi, Ltd. . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Environmental Impact & Energy Resolution Authority
Pollution Control Revenue VRDN, 3.95%, 6/1/98,
LOC: Swiss Bank Corp.. . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
St. Louis IDA Revenue VRDN, 4.30%, 1/1/21,
LOC: Banca Nazionale Del Lavoro. . . . . . . . . . . . . . . . . . . . 9,100,000 9,100,000
State IDA Revenue VRDN, 4.665%, 3/1/01,
LOC: FNB Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . 955,000 955,000
</TABLE>
14 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
NEBRASKA - 0.5%
Buffalo County IDA Revenue VRDN, 4.20%, 2/1/15,
LOC: Bank of Tokyo-Mitsubishi, Ltd.. . . . . . . . . . . . . . . . . . $2,900,000 $2,900,000
IDA Revenue VRDN, 4.55%, 12/1/04,
LOC: Sanwa Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
NEW HAMPSHIRE - 1.7%
State Business Financial Authority Facilities Revenue VRDN,
4.00%, 12/1/17, LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . 8,000,000 8,000,000
State Turnpike Systems Revenue VRDN, 3.90%, 2/1/24,
LOC: CoreStates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,400,000 16,400,000
NEW JERSEY - 0.8%
State Economic Development Authority Revenue VRDN,
4.25%, 3/1/98, LOC: CoreStates . . . . . . . . . . . . . . . . . . . . 2,275,000 2,275,000
4.20%, 1/1/00, LOC: Marine Midland Bank. . . . . . . . . . . . . . . . 1,020,000 1,020,000
3.95%, 8/1/01, LOC: CoreStates . . . . . . . . . . . . . . . . . . . . 600,000 600,000
5.15%, 12/1/15, LOC: Asahi Bank, Ltd.. . . . . . . . . . . . . . . . . 7,400,000 7,400,000
NEW MEXICO - 0.2%
State Tax and Revenue Anticipation Notes, Series A,
4.50%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,009,571
NEW YORK - 2.7%
New York City Revenue Anticipation Notes, Series A, 4.50%,
6/30/98, LOC: Bayerische Landesbank. . . . . . . . . . . . . . . . . . 31,000,000 31,124,653
Orange County Industrial Development Agency Revenue VRDN,
5.61%, 12/1/05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000 450,000
Orange County IDA Revenue VRDN,
4.45%, 6/1/98, LOC: Sakura Bank. . . . . . . . . . . . . . . . . . . . 7,800,000 7,800,000
NEVADA - 0.1%
Henderson Public Improvement Trust Revenue VRDN, 4.30%,
4/1/07, LOC: NationsBank . . . . . . . . . . . . . . . . . . . . . . . 1,900,000 1,900,000
NORTH CAROLINA - 0.7%
Guilford County Industrial Facilities & Pollution Control Revenue
VRDN, 4.80%, 12/1/04, LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . 3,000,000 3,000,000
Wake County Industrial Facilities & Pollution Financing Authority
Revenue VRDN, 4.15%, 9/1/15, LOC: Sumitomo Bank, Ltd.. . . . . . . . . 7,900,000 7,900,000
OHIO - 0.3%
Franklin County Hospital Revenue VRDN, 4.10%, 12/1/11,
LOC: Morgan Guaranty Trust . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,003,431
OKLAHOMA - 1.2%
Cleveland MFH Revenue VRDN, 3.90%, 4/1/20,
SURBD: Continental Casualty Co.. . . . . . . . . . . . . . . . . . . . 5,930,000 5,930,000
State Housing Finance Authority Revenue VRDN, 4.90%,
12/1/05, C/LOC: Binghampton Savings Bank . . . . . . . . . . . . . . . 5,900,000 5,900,000
Tulsa IDA Revenue VRDN, Series A, 4.15%, 5/1/98,
LOC: Sanwa Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
</TABLE>
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 15
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA - 3.8%
Berks County IDA Revenue VRDN, 4.30%, 7/1/25,
LOC: CoreStates. . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,575,000 $2,575,000
Chester County IDA Revenue VRDN, 4.30%, 4/1/17,
LOC: CoreStates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300,000 3,300,000
Delaware County Authority Revenue VRDN, 4.10%, 7/1/14,
LOC: PNC Bank NA . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500,000 8,500,000
Philadelphia MFH Redevelopment Authority Revenue VRDN,
4.05%, 12/1/09, LOC: Marine Midland Bank . . . . . . . . . . . . . . . 2,725,000 2,725,000
Philadelphia Tax and Revenue Anticipation Notes, Series A,
4.50%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,011,851
Philadelphia School District Tax and Revenue Anticipation Notes,
4.50%, 6/30/98, LOC: Commerze Bank . . . . . . . . . . . . . . . . . . 27,000,000 27,068,877
State GO Bonds, 5.00%, 11/15/98, AMBAC Insured . . . . . . . . . . . . . 5,000,000 5,051,571
West Cornwall Township Municipal Authority Revenue VRDN,
4.30%, 3/1/16, LOC: CoreStates . . . . . . . . . . . . . . . . . . . . 1,845,000 1,845,000
PUERTO RICO - 0.1%
Electric Power Authority Municipal Trust Receipts, 3.55%, 7/1/22,
MBIA Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
SOUTH CAROLINA - 1.7%
Dorchester County Industrial Revenue VRDN, 4.80%, 10/1/24,
LOC: Bayerische Vereinsbank. . . . . . . . . . . . . . . . . . . . . . 5,100,000 5,100,000
Orangeburg IDA Revenue VRDN, 4.665%, 6/1/08,
LOC: FNB Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,450,000 4,450,000
State Housing Finance and Development Authority Revenue
VRDN, 4.00%, 7/1/07, SURBD: Continental Casualty Co. . . . . . . . . . 6,000,000 6,000,000
State Public Service Authority Revenue VRDN, 3.90%, 1/1/25,
FGIC Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,700,000 8,700,000
TENNESSEE - 1.3%
Chattanooga IDA Revenue VRDN, 4.35%, 91/17,
LOC: National Bank of Canada . . . . . . . . . . . . . . . . . . . . . 5,500,000 5,500,000
Coffee County IDR VRDN, 4.10%, 5/1/12,
LOC: Barnett Bank of South Florida . . . . . . . . . . . . . . . . . . 5,100,000 5,100,000
Marion County Industrial Environmental Development
Revenue Bonds, 3.85%, 2/2/98, LOC: Fleet Bank. . . . . . . . . . . . . 3,000,000 3,000,000
Shelby County Health Educational and Housing Facilities Board
Revenue VRDN, 4.40%, 7/1/22, LOC: NationsBank. . . . . . . . . . . . . 5,000,000 5,000,000
TEXAS - 7.7%
Bexar County MFH Revenue VRDN, 4.72%, 6/1/28,
LOC: Heller Financial. . . . . . . . . . . . . . . . . . . . . . . . . 5,400,000 5,400,000
Cleburne IDA Revenue VRDN, 4.30%, 2/1/04,
LOC: National City Bank. . . . . . . . . . . . . . . . . . . . . . . . 2,200,000 2,200,000
Grand Prairie IDA Revenue VRDN, 4.15%, 12/1/06,
LOC: PNC Bank, N.A.. . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,000 1,100,000
Greater Texas Student Loan GO Bonds, 3.70%, 4/1/05,
LOC: SLMA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,497,037
Harris County Health Facilities Development Authority Revenue
VRDN, 4.05%, 12/1/25, IA: Prudential Insurance Co. . . . . . . . . . . 64,450,000 64,450,000
</TABLE>
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16 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS (CONT'D)
Harris County IDA Revenue VRDN, 4.90%, 8/1/01,
LOC: Sakura Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . $3,500,000 $3,500,000
State MFH Floating Trust Receipts, 3.95%, 12/31/22,
LOC: International Neder Verz. . . . . . . . . . . . . . . . . . . . . 6,190,000 6,190,000
State Tax and Revenue Anticipation Notes, Series A,
4.75%, 8/31/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,950,000 3,974,481
Tarrant County Housing Financial Corp. Floating Trust Receipts,
3.95%, 8/1/25, LOC: International Neder Verz . . . . . . . . . . . . . 21,000,000 21,000,000
UTAH - 2.5%
Provo City MFH Revenue VRDN, 4.65%, 12/15/10,
LOC: Dai-Ichi Kangyo Bank. . . . . . . . . . . . . . . . . . . . . . . 4,400,000 4,400,000
Tooele County Hazardous Waste Treatment Revenue
Commercial Paper, GA: Union Pacific Corp.
4.30%, 1/15/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,900,000 9,900,000
4.25%, 1/22/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800,000 7,800,000
4.45%, 2/12/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,000,000
University of Utah Revenue VRDN, 4.30%, 12/1/15,
LOC: First Security Bank . . . . . . . . . . . . . . . . . . . . . . . 4,275,000 4,275,000
VERMONT - 0.1%
State Educational & Health Buildings Financing Agency
Revenue VRDN, 4.20%, 6/1/05, LOC: FNB Boston . . . . . . . . . . . . . 1,620,000 1,620,000
State IDA Revenue VRDN, 4.415%, 12/1/04,
LOC: FNB Boston. . . . . . . . . . . . . . . . . . . . . . . . . . . . 370,000 370,000
VIRGINIA - 2.2%
Bedford County IDA Revenue VRDN, 4.40%, 12/1/25,
LOC: DG Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,500,000 10,500,000
Henrico County IDA Revenue VRDN, 4.50%, 10/1/00,
LOC: Tokai Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . 1,600,000 1,600,000
Richmond IDA Revenue VRDN, 5.50%, 12/1/17,
LOC: Banque Paribas. . . . . . . . . . . . . . . . . . . . . . . . . . 10,100,000 10,100,000
Russell County IDA Revenue Bonds, 5.45%, 4/1/98,
IA: Escrowed/T-Bills . . . . . . . . . . . . . . . . . . . . . . . . . 9,250,000 9,250,000
WASHINGTON - 1.4%
Grant County Public Utilities VRDN, 4.25%, 10/1/11,
LOC: Southtrust Bank, AL . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
Port Everett Limited VRDN, 4.35%, 12/1/06,
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . . 2,550,000 2,550,000
Richland Golf Enterprise Revenue VRDN, 4.15%, 12/1/21,
LOC: Seafirst BOA, NW. . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Seattle MFH Revenue VRDN, 4.10%, 12/1/26,
LOC: Seafirst BOA, NW. . . . . . . . . . . . . . . . . . . . . . . . . 6,420,000 6,420,000
Yakima County Public Corp. Revenue VRDN, 4.10%, 8/1/06,
LOC: Seafirst BOA, NW. . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000 4,200,000
WEST VIRGINIA - 0.3%
Harris County IDA Revenue VRDN, 4.25%, 6/1/14,
LOC: Societe Generale. . . . . . . . . . . . . . . . . . . . . . . . . 4,140,000 4,140,000
</TABLE>
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ANNUAL REPORT CALVERT TAX-FREE RESERVES - 17
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
WISCONSIN - 1.7%
Eau Claire IDA Revenue VRDN, 4.00%, 5/1/07,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . $3,500,000 $3,500,000
Germantown IDA Revenue VRDN, 4.00%, 5/1/17,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
Grafton IDA Revenue VRDN, 4.15%, 12/1/17,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
Mantowoc IDA Revenue VRDN, 4.00%, 5/1/17,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . 3,100,000 3,100,000
State Housing and Economic Development Authority
Revenue VRDN,
3.85%, 3/2/98, TOA: FNB Chicago . . . . . . . . . . . . . . . . . . 9,055,000 9,055,000
4.15%, 3/1/20, FSA Insured. . . . . . . . . . . . . . . . . . . . . 4,490,000 4,490,000
OTHER - 6.8%
ABN Amro Chicago Corp. LeaseTOPS Trust Certificates, 4.50%,
10/4/00, BPA: LaSalle Bank . . . . . . . . . . . . . . . . . . . . . . 14,143,000 14,143,000
Capital Realty Investors Tax Exempt Certificates Revenue VRDN,
3.90%, 12/1/04, LOC: Swiss Bank Corp.. . . . . . . . . . . . . . . . . 16,400,000 16,400,000
Series 96-2, 3.90%, 2/1/04, LOC: Swiss Bank Corp.. . . . . . . . . . . 18,205,000 18,205,000
Morgan Keegan Trust Receipts,
Series C, 4.35%, 10/1/27, IA: Escrowed/T-Bills . . . . . . . . . . . . 14,510,000 14,510,000
Series A, 4.35%, 5/1/30, IA: Escrowed/T-Bills. . . . . . . . . . . . . 6,330,000 6,330,000
Series B, 4.35%, 5/1/30, IA: Escrowed/T-Bills. . . . . . . . . . . . . 10,420,000 10,420,000
Pitney Bowes Corporation LeaseTOPS Trust Certificates,
4.10%, 4/1/98, BPA: Pitney Bowes Credit. . . . . . . . . . . . . . . . 12,904,484 12,904,484
4.10%, 2/11/11, LOC: Landesbank Hessen-Thuringen . . . . . . . . . . . 6,638,000 6,638,000
----------------
TOTAL INVESTMENTS (Cost $1,462,638,324) - 100.4%. . . . . . . . . 1,462,638,324
Other assets and liabilities, net - (0.4%). . . . . . . . . . . . (6,201,726)
----------------
NET ASSETS - 100.0% . . . . . . . . . . . . . . . . . . . . . . . $1,456,436,598
----------------
----------------
See notes to financial statements.
</TABLE>
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18 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
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<PAGE>
LIMITED-TERM PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 100.5% AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALABAMA - 0.2%
Athens IDA Revenue VRDN, 4.50%, 6/1/05,
LOC: Tokai Bank, Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . $600,000 $600,000
Montgomery Wynlakes Governmental Utilities Service Corp.
Revenue VRDN, 4.25%, 5/1/06, LOC: Amsouth Bank . . . . . . . . . . . . 200,000 200,000
ARIZONA - 8.8%
Apache County IDA Pollution Control Revenue VRDN, Series B,
4.05%, 10/1/21, LOC: Bank of Tokyo - Mitsubishi. . . . . . . . . . . . 21,500,000 21,500,000
Educational Loan Marketing Corporation Revenue Bonds,
6.55%, 3/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,920,000 12,261,389
Glendale County IDA Revenue Bonds, 5.20%, 12/1/13,
LOC: Dresdner Bank (Tender 12/1/98 @100) . . . . . . . . . . . . . . . 2,450,000 2,470,017
Pinal County IDA Revenue VRDN, 4.95%, 12/1/05,
LOC: Industrial Bank of Japan. . . . . . . . . . . . . . . . . . . . . 7,000,000 7,000,000
CALIFORNIA - 11.3%
Compton Community Redevelopment Agency Tax Allocation
Notes Series 1, 5.50%, 8/1/98. . . . . . . . . . . . . . . . . . . . . 645,000 651,173
Del Norte Bond Anticipation Notes, 5.50%, 11/1/98. . . . . . . . . . . . 3,620,000 3,623,005
Health Facilities Financing, Downey Community Hospital
Revenue Bonds, 4.75%, 5/15/99. . . . . . . . . . . . . . . . . . . . . 2,220,000 2,238,670
Los Angeles Unilateral School District Tax and Revenue
Anticipation Notes, 4.50%, 10/1/98 . . . . . . . . . . . . . . . . . . 5,500,000 5,530,745
Orange County Apartment Development Revenue Bonds, 4.20%,
11/1/05, LOC: Wells Fargo Bank, NA . . . . . . . . . . . . . . . . . . 2,300,000 2,300,000
Paramount MFH Revenue VRDN, 4.72%, 10/1/18,
LOC: Heller Financial. . . . . . . . . . . . . . . . . . . . . . . . . 200,000 200,000
San Bernardino Public Safety Authority, Insurance Financing
Project Revenue Bonds, Series A,
4.50%, 11/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400,000 8,449,140
4.60%, 5/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800,000 2,824,472
San Diego Area Local Government COPs, 4.50%, 10/1/98,
FSA Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500,000 4,524,165
San Jose Financing Authority, Convention Center Project
Revenue Bonds, Series C, 5.75%, 9/1/98 . . . . . . . . . . . . . . . . 575,000 582,452
State Long Opt Period GO Bonds, 4.00%, 4/1/19,
TOA: Citibank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,735,000 3,735,000
State Public Works Board Lease Revenue Bonds, Series C,
4.75%, 9/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,960,000 14,143,574
Statewide Community Development Authority Tax and Revenue
Anticipation Notes, Series B, 4.75%, 9/30/98, FSA Insured. . . . . . . 5,860,000 5,903,071
Tahoe City Public Utility District, Capital Facilities Project
COPs, Series B, 5.60%, 6/1/98. . . . . . . . . . . . . . . . . . . . . 465,000 468,371
COLORADO - 0.4%
Denver City & County Airport Revenue VRDN,
7.00%, 11/15/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,100,060
</TABLE>
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ANNUAL REPORT CALVERT TAX-FREE RESERVES - 19
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONNECTICUT - 0.4%
State Recovery Authority Revenue Bond, 5.60%, 11/15/99 . . . . . . . . . $1,945,000 $2,000,860
DELAWARE - 1.9%
State Economic IDA Revenue VRDN, Series C, 4.20%, 8/1/29,
LOC: Canadian Imperial Bank. . . . . . . . . . . . . . . . . . . . . . 9,500,000 9,500,000
DISTRICT OF COLUMBIA - 0.1%
Redevelopment Agency Sports Arena Revenue Bonds,
5.10%, 11/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 502,680
FLORIDA - 1.6%
Jacksonville Hospital Revenue VRDN, 4.65%, 2/1/18,
LOC: Sumitomo Bank Ltd.. . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Orange County Housing Financial Authority Revenue VRDN,
3.65%, 8/1/08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 150,000
Palm Beach Housing Finance Authority Mallards Cove Revenue
VRDN, 5.525%, 3/1/22, INSUR: Fireman's Insurance Co.. . . . . . . . . 4,470,000 4,470,000
Volusia County MFH Revenue VRDN, Series C, 4.525%, 9/1/05,
LOC: Amsouth Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 270,000
GEORGIA - 1.9%
Association County Community Leasing Program COPs,
4.00%, 12/1/98, AMBAC Insured. . . . . . . . . . . . . . . . . . . . . 1,050,000 1,051,743
Fulton County MFH Revenue VRDN, 3.95%, 1/1/08,
LOC: International Neder Verz. . . . . . . . . . . . . . . . . . . . . 7,000,000 7,000,000
Tri-City Hospital Authority Revenue Bonds, 5.25%, 7/1/99 . . . . . . . . 1,000,000 1,013,660
GUAM - 0.8%
Guam Government GO Bonds, Series A, 5.75%, 8/15/99 . . . . . . . . . . . 3,710,000 3,797,890
ILLINOIS - 5.3%
Chicago Board of Education COPs, 4.35%, 12/1/98,
LOC: Canadian Imperial . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,037,040
Chicago Parking District GO Refunding Bonds,
5.50%, 1/1/99, FGIC Insured. . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,033,040
Fulton IDA Revenue VRDN, 4.00%, 4/1/12,
LOC: Firstar Bank Milwaukee. . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
State IDA Revenue VRDN, 4.30%, 9/2/05,
LOC: American National Bank & Trust. . . . . . . . . . . . . . . . . . 1,800,000 1,800,000
State Sales Tax Revenue Bonds, Series Q, 5.10%, 6/15/99. . . . . . . . . 10,000,000 10,167,900
INDIANA - 1.0%
Shelbyville Economic Development Revenue VRDN, 4.60%,
9/1/06, LOC: Industrial Bank of Japan. . . . . . . . . . . . . . . . . 5,100,000 5,100,000
KENTUCKY - 0.4%
State Turnpike Authority Economic Development Revenue
Bonds, 5.00%, 1/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000 1,800,000
LOUISIANA - 1.6%
Offshore Terminal Authority Deepwater Port Revenue Bonds,
5.40%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,047,150
6.45%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,780,000 2,826,120
</TABLE>
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20 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND - 4.6%
Baltimore (The Zamoiski Company Project), 6.647%, 12/1/09. . . . . . . . $7,705,171 $7,705,171
Montgomery County Economic Development Bonds, 6.375%,
11/1/09, LOC: First National Bank of Maryland. . . . . . . . . . . . . 900,000 901,665
Montgomery County Housing Opportunity Revenue VRDN,
Issue I, 3.95%, 6/1/29, LOC: Key Bank. . . . . . . . . . . . . . . . . 100,000 100,000
State Economic Development Corp. Revenue VRDN, 4.20%,
6/1/20, LOC: NationsBank NA. . . . . . . . . . . . . . . . . . . . . . 380,000 380,000
State and Local Facilities Unlimited GO Bonds, First Series,
5.00%, 3/1/00. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,185,760
State Health and Higher Educational Facilities Authority Revenue
Bonds, 5.50%, 7/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . 2,855,000 2,907,418
State Industrial Authority Economic Development Bonds, 5.25%,
12/31/11, LOC: First National Bank of Maryland . . . . . . . . . . . . 2,310,000 2,311,201
MASSACHUSETTS - 2.5%
Housing Finance Agency MFH Revenue Bonds, Series A,
5.00%, 6/1/98, AMBAC Insured . . . . . . . . . . . . . . . . . . . . . 495,000 497,465
5.00%, 12/1/98, AMBAC Insured. . . . . . . . . . . . . . . . . . . . . 505,000 510,530
5.10%, 6/1/99, AMBAC Insured . . . . . . . . . . . . . . . . . . . . . 520,000 527,212
Municipal Wholesale Electric Power Company Revenue Bonds,
6.10%, 7/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,240,000 5,299,631
Series B, 6.25%, 7/1/99. . . . . . . . . . . . . . . . . . . . . . . . 5,025,000 5,185,800
MICHIGAN - 3.1%
Detroit Limited GO Bonds, Series A, 5.20%, 5/1/98. . . . . . . . . . . . 5,330,000 5,352,333
Southfield Economic Development Corporation Revenue VRDN,
5.95%, 5/15/11, INSUR: Firemans Insurance Co.. . . . . . . . . . . . . 6,850,000 6,850,000
State Housing Development Authority Revenue Bonds, 6.00%,
10/1/11, (Escrowed in U.S. Treasury Obligations) . . . . . . . . . . . 275,000 277,931
State Housing Development Authority Limited Obligation
Revenue VRDN, 5.00%, 10/1/11 . . . . . . . . . . . . . . . . . . . . . 570,000 571,186
State Hospital Finance Authority Pontiac Osteopathic Revenue Bonds,
4.90%, 2/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,610
5.10%, 2/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,008,920
State Strategic Limited Obligation Revenue VRDN, 5.15%,
11/1/09, LOC: Tokai Bank Ltd.. . . . . . . . . . . . . . . . . . . . . 150,000 150,000
MINNESOTA - 1.3%
Edina MFH Vernon Terrace Revenue VRDN, 5.00%, 7/1/25 . . . . . . . . . . 6,450,000 6,513,017
MISSISSIPPI - 0.2%
Higher Education Student Loan Revenue Bonds, Series C,
6.05%, 1/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,013,620
MISSOURI - 0.3%
Carthage IDA Revenue VRDN, 4.30%, 11/1/10,
LOC: Bank of Tokyo - Mitsubishi. . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
Saint Louis IDA Revenue VRDN, 4.30%, 1/1/21,
LOC: Banca Naz Del Lavoro. . . . . . . . . . . . . . . . . . . . . . . 200,000 200,000
NEVADA - 3.4%
Housing Division Revenue VRDN, 3.95%, 10/01/30,
LOC: FHLB - SF . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,490,000 16,490,000
</TABLE>
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ANNUAL REPORT CALVERT TAX-FREE RESERVES - 21
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW HAMPSHIRE - 0.0%
Higher Education & Health Revenue Bonds, 7.50%, 12/1/00,
FGIC Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 $200,640
NEW MEXICO - 0.8%
Albuquerque Unlimited GO Bonds, 5.25%, 7/1/98. . . . . . . . . . . . . . 3,735,000 3,763,797
NEW YORK - 21.7%
City University COPs, 4.65%, 8/15/98 . . . . . . . . . . . . . . . . . . 4,970,000 4,996,142
Dormitory Authority Revenue Bonds, Series B,
5.00%, 2/15/00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,460,000 3,523,560
Energy Research and Development Authority State Service
Contract Revenue Bonds, 5.00%, 4/1/98. . . . . . . . . . . . . . . . . 595,000 596,773
Municipal Assistance Corporation for the City of New York,
Series I, 5.00%, 7/1/99. . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 15,240,300
Nassau County Unlimited GO Bonds,
Series V, 5.125%, 3/1/99, AMBAC Insured. . . . . . . . . . . . . . . . 3,800,000 3,855,480
5.125%, 3/1/00, AMBAC Insured. . . . . . . . . . . . . . . . . . . . . 4,330,000 4,432,621
New York City GO Bonds,
5.00%, 4/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,310,000 1,329,257
5.00%, 4/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725,000 735,657
Series L, 5.25%, 8/1/99. . . . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,952,519
Orange County IDA Revenue VRDN, 5.61%, 12/1/05,
LOC: Summit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 620,000 620,000
Port Authority New York and New Jersey, 1st Installment KIAC
Project Special Obligation Revenue Bonds, 6.25%, 10/1/99 . . . . . . . 5,400,000 5,546,772
State COPs Revenue Bonds,
4.90%, 3/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,775,000 5,785,395
4.40%, 8/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,465,000 9,497,749
4.90%, 9/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,920,000 5,962,565
4.60%, 2/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,710,000 12,801,131
4.75%, 2/1/00. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,915,000 14,085,041
State Thruway Authority Highway and Bridge Revenue Bonds,
Series A, 4.75%, 4/1/99, AMBAC Insured . . . . . . . . . . . . . . . . 10,490,000 10,602,243
Series A, 4.75%, 4/1/00, AMBAC Insured . . . . . . . . . . . . . . . . 3,675,000 3,735,123
OHIO - 3.8%
Cleveland Motor Vehicle Motorized Equipment
Certificates of Participation, 6.50%, 1/1/98 . . . . . . . . . . . . . 1,060,000 1,060,000
Cleveland School District GO Bonds,
7.25%, 6/15/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,450,000 2,469,037
Lorraine County Hospital Revenue Bonds, 5.00%, 9/1/99. . . . . . . . . . 2,000,000 2,033,960
Marion County Hospital Revenue Bonds, 5.25%, 5/15/99 . . . . . . . . . . 1,175,000 1,191,003
State Housing Fin Agency Mtg Revenue VRDN,
4.20%, 9/1/30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 12,006,000
PENNSYLVANIA - 4.4%
Northeastern Hospital Authority Revenue VRDN, 7.65%,
7/1/10, (Prerefunded 7/1/99 @ 102) . . . . . . . . . . . . . . . . . . 3,780,000 4,043,164
Philadelphia Airport Revenue Bonds,
5.25%, 6/15/99, FGIC Insured . . . . . . . . . . . . . . . . . . . . . 1,750,000 1,773,205
5.25%, 6/15/00, FGIC Insured . . . . . . . . . . . . . . . . . . . . . 3,690,000 3,774,316
</TABLE>
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22 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA (CONT'D)
Philadelphia Hospitals & Higher Education Revenue Bonds,
5.05%, 7/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,200,000 $1,205,760
5.35%, 7/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,335,000 1,357,094
Philadelphia Municipal Authority, Philadelphia Gas Works
Equipment COPs, Asset Guaranty Insured
5.95%, 4/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,000 1,608,208
5.95%, 10/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,000 1,624,320
5.95%, 4/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600,000 1,636,576
Philadelphia Redevelopment MFH Revenue VRDN, 4.05%,
12/1/09, LOC: Marine Midland Bank. . . . . . . . . . . . . . . . . . . 50,000 50,000
Philadelphia Water and Sewer Revenue Bonds, 7.30%, 8/1/98. . . . . . . . 4,400,000 4,486,020
PUERTO RICO - 3.0%
Electric Power Authority Revenue Bonds, Series W,
5.00%, 7/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,018,390
Puerto Rico Commonwealth GO Bonds, 5.50%, 7/1/99 . . . . . . . . . . . . 10,200,000 10,429,602
Infrastructure Financing Authority Revenue Bonds, Series A,
7.40%, 7/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,350,000 1,373,976
SOUTH DAKOTA - 0.2%
Housing Development Authority, Home Ownership Mortgage
Revenue Bonds, Series A, 4.60%, 5/1/99 . . . . . . . . . . . . . . . . 1,000,000 1,007,690
TENNESSEE - 2.3%
Coffee County Industrial Board Revenue VRDN, 5.40%,
12/1/01, LOC: Asahi Bank . . . . . . . . . . . . . . . . . . . . . . . 6,300,000 6,300,000
Knox County Health Educational Hospital Facility Revenue Bonds,
7.00%, 1/1/15, MBIA Insured. . . . . . . . . . . . . . . . . . . . . . 4,450,000 4,785,486
TEXAS - 3.0%
Brazos County Health Facilities Development, St. Joseph Hospital
and Health Center Revenue Bonds, 4.875%, 1/1/98. . . . . . . . . . . . 1,590,000 1,590,000
Harris County Health Facilities Development Floating Trust
Receipts, Series FR-2, 4.05%, 12/1/25, IA: Prudential
Insurance Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 11,700,000 11,700,000
Irving Hospital Authority Healthcare System Revenue Bonds,
Series A, 4.50%, 7/1/98, FSA Insured . . . . . . . . . . . . . . . . . 1,490,000 1,495,409
UTAH - 1.0%
Tooele County Hazardous Waste Treatment Revenue VRDN,
4.45%, 11/1/26, GA: Union Pacific Corp.. . . . . . . . . . . . . . . . 5,000,000 5,000,000
VERMONT - 2.5%
State IDA Revenue VRDN, 5.775%, 12/1/01,
LOC: Vermont National Bank . . . . . . . . . . . . . . . . . . . . . . 650,000 650,000
Student Assistance Corp. Promissory Notes, 4.55%, 12/15/00 . . . . . . . 11,830,000 11,832,957
VIRGINIA - 1.6%
Henrico County IDA Revenue VRDN, 4.50%, 10/1/00,
LOC: Tokai Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 200,000
Public School Authority Revenue Bonds, Series I, 4.25%, 8/1/99 . . . . . 5,520,000 5,548,649
State Housing Development Authority Construction Loan Notes,
6.875%, 1/1/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,885,000 1,885,000
</TABLE>
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ANNUAL REPORT CALVERT TAX-FREE RESERVES - 23
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
WASHINGTON - 3.9%
Public Power Supply Revenue Bonds, Series A,
4.50%, 7/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,935,000 $1,948,119
4.75%, 7/1/99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,103,800
State GO Bonds, Series R, 4.20%, 8/1/98. . . . . . . . . . . . . . . . . 7,000,000 7,019,810
OTHER - 1.2%
Fort Mojave Indian Tribe of Arizona, California and Nevada
Public Facilities Combined Limited Obligation and
Revenue Bonds Adjustable Rate and Tender Series A
of 1993, 11.50%, 12/1/18 . . . . . . . . . . . . . . . . . . . . . . . 4,105,180 4,105,180
Pitney Bowes Credit Corp. LeaseTOPS Trust Certificates,
4.10%, 4/1/98, BPA: Pitney Bowes Credit. . . . . . . . . . . . . . . . 1,500,000 1,500,000
4.10%, 2/11/11, LOC: Landesbank Hessen-Thuringen . . . . . . . . . . . 400,000 400,000
TOTAL INVESTMENTS (Cost $490,870,146) - 100.5%. . . . . . . . . . 492,788,353
Other assets and liabilities, net - (0.5%). . . . . . . . . . . . (2,608,649)
---------------
NET ASSETS - 100.0% . . . . . . . . . . . . . . . . . . . . . . . $490,179,704
---------------
---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
24 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
- --------------------------------------------------------------------------------
<PAGE>
LONG-TERM PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.1% AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALASKA - 2.2%
Anchorage Revenue Bonds, 6.00%, 10/1/14, FGIC Insured. . . . . . . . . . $1,000,000 $1,125,840
ARIZONA - 4.5%
Maricopa County School District 69 Revenue Bonds, 6.25%,
7/1/14, FSA Insured. . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,317,980
CALIFORNIA - 4.5%
Los Angeles Unilateral School District GO Bonds, Series A,
6.00%, 7/1/15, FGIC Insured. . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,130,800
Paramount MFH Revenue VRDN, 4.72%, 10/1/18 . . . . . . . . . . . . . . . 1,150,000 1,150,000
COLORADO - 2.9%
City and County Airport Revenue Bonds, Series A,
7.20%, 11/15/02. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000 1,453,270
DELAWARE - 0.2%
Dover Electric Power Revenue Bonds, 7.00%, 7/1/15. . . . . . . . . . . . 80,000 87,006
FLORIDA - 22.8%
Dade County Educational Facilities Authority Revenue Bonds,
6.00%, 4/1/08, MBIA Insured. . . . . . . . . . . . . . . . . . . . . . 1,700,000 1,915,611
Dade County GO Bonds, 7.75%, 10/1/18, AMBAC Insured. . . . . . . . . . . 2,000,000 2,712,940
Dade County IDA Revenue Bonds, 8.00%, 6/1/22 . . . . . . . . . . . . . . 1,900,000 2,103,338
Flagler County Special Assessment Revenue Bonds,
7.20%, 7/1/14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,111,920
Tampa Capital Improvement Program Revenue Bonds, Series B,
8.375%, 10/1/18, IA: Yasuda T&B. . . . . . . . . . . . . . . . . . . . 1,500,000 1,537,410
Tampa Palms Community Development Special Assessment
Revenue Bonds, 5.90%, 5/1/08, MBIA Insured . . . . . . . . . . . . . . 2,000,000 2,228,000
GEORGIA - 4.3%
Cobb-Marietta Coliseum & Exhibit Hall Authority Revenue
Bonds, 6.75%, 10/1/26. . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,216,680
GUAM - 2.0%
Government Limited Obligation Revenue Bonds, Series A,
5.00%, 11/1/17, AMBAC Insured. . . . . . . . . . . . . . . . . . . . . 1,000,000 995,200
ILLINOIS - 2.0%
Fulton IDA Revenue VRDN, 4.00%, 4/1/12,
LOC: Firstar Bank, Milwaukee . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
INDIANA - 2.4%
Indianapolis Local Public Improvement Bond Bank
Revenue Bonds, 6.75%, 2/1/14 . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,199,200
</TABLE>
- --------------------------------------------------------------------------------
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 25
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
LOUISIANA - 7.2%
State Public Finance Agency MFH Revenue Bonds,
7.75%, 11/1/16, Asset Guaranty Insured . . . . . . . . . . . . . . . . $1,690,000 $1,814,874
7.00%, 6/1/24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,690,000 1,847,998
MARYLAND - 6.4%
Cambridge Economic Development Revenue Bonds,
8.50%, 4/1/14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,100,000 2,374,302
State Community Development Authority Mortgage
Revenue Bonds, 7.70%, 4/1/15 . . . . . . . . . . . . . . . . . . . . . 845,000 886,033
MASSACHUSETTS - 2.0%
State GO Bonds, Series A, 5.00%, 7/1/12,
AMBAC Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,022,820
MICHIGAN - 5.6%
Detroit Water Supply System Revenue Bonds, Series A,
5.00%, 7/1/27, MBIA Insured . . . . . . . . . . . . . . . . . . . . . 1,700,000 1,656,497
Southfield Economic Development Corporation Revenue
VRDN, 5.95%, 5/15/11, INSUR: Firemans Insurance
Company, NJ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000 80,000
State Hospital Finance Authority Revenue Bonds,
7.00%, 11/1/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,116,300
NEW JERSEY - 4.5%
Jersey City GO Bonds, Series A, 6.25%, 10/1/10 . . . . . . . . . . . . . 2,000,000 2,313,400
NEW YORK - 5.6%
New York and New Jersey Port Authority, Ninety-Third Series
Consolidated Revenue Bonds, 6.125%, 6/1/2094 . . . . . . . . . . . . . 2,500,000 2,865,500
OHIO - 2.1%
Cleveland Waterworks Revenue Bonds, 5.50%, 1/1/21,
MBIA Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,070,730
RHODE ISLAND - 2.2%
Port Authority & Economic Development Corp. Airport Revenue
Bonds, Series A, 7.00%, 7/1/14, FSA Insured. . . . . . . . . . . . . . 500,000 612,100
State Housing & Mortgage Finance Corp. Revenue Bonds, Series B,
7.95%, 10/1/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 527,225
TEXAS - 6.5%
Houston Water Conveyance System Contract COPs,
6.125%, 12/15/09, AMBAC Insured. . . . . . . . . . . . . . . . . . . . 1,000,000 1,146,970
Tarrant County Health Facilities Development Revenue Bonds,
Series A, 5.75%, 2/15/15, MBIA Insured . . . . . . . . . . . . . . . . 2,000,000 2,171,080
VERMONT - 2.6%
State Educational and Health Buildings Finance Agency
Hospital Revenue Bonds, 6.00%, 9/1/06. . . . . . . . . . . . . . . . . 1,250,000 1,346,050
</TABLE>
- --------------------------------------------------------------------------------
26 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA - 5.6%
Arlington County GO Bonds, Series 1993,
6.00%, 6/1/11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000,000 $1,131,450
Chesapeake IDA Public Facilities Lease Revenue Bonds, 6.00%,
6/1/08, MBIA Insured . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,126,270
Henrico County IDA Revenue VRDN, 4.50%, 10/01/00,
LOC: Tokai Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 600,000
------------
Total Municipal Obligations (Cost $46,352,074) . . . . . . . . . . . . 49,994,794
------------
OPTIONS PURCHASED - 0.1% CONTRACTS
- -----------------------------------------------------------------------------------------------------
Put Options on June 1998 U.S. Treasury Bond Futures,
Expiration 5/15/98, Strike Price 112 . . . . . . . . . . . . . . . . . 75 29,297
------------
Total Options (Cost $60,510) . . . . . . . . . . . . . . . . . . . . . 29,297
------------
TOTAL INVESTMENTS (Cost $46,412,584) - 98.2% . . . . . . . . . . $50,024,091
Other assets and liabilities, net - 1.8% . . . . . . . . . . . . 941,514
------------
NET ASSETS - 100.0%. . . . . . . . . . . . . . . . . . . . . . . $50,965,605
------------
------------
</TABLE>
<TABLE>
<S> <C>
EXPLANATION OF GUARANTEES:
BPA: BOND-PURCHASE AGREEMENT GIC: GUARANTEED INVESTMENT CONTRACT
GA: GUARANTY AGREEMENT SURBD: SURETY BOND
LOC: LETTER OF CREDIT TOA: TENDER OPTION AGREEMENT
C/LOC: COLLATERALIZED LOC IA: INVESTMENT AGREEMENT
INSUR: INSURANCE
ABBREVIATIONS:
IDA: INDUSTRIAL DEVELOPMENT AUTHORITY VRDN: VARIABLE RATE DEMAND NOTES
MFH: MULTI-FAMILY HOUSING GO: GENERAL OBLIGATION
COPs: CERTIFICATES OF PARTICIPATION
CERTAIN SECURITIES HAVE OPTIONAL OR MANDATORY TENDER FEATURES WHICH GIVE THEM A SHORTER EFFECTIVE
MATURITY DATE.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
- --------------------------------------------------------------------------------
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 27
- --------------------------------------------------------------------------------
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY MARKET LIMITED-TERM LONG-TERM
ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment in securities . . . . . . . . . . . . . . . .$1,462,638,324 $492,788,353 $50,024,091
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . -- 2,713,129 149,248
Receivable for securities sold . . . . . . . . . . . . . 10,312,247 -- 2,503,075
Receivable for shares sold . . . . . . . . . . . . . . . 4,722,509 -- --
Interest receivable. . . . . . . . . . . . . . . . . . . 9,423,489 6,377,837 770,185
Other assets . . . . . . . . . . . . . . . . . . . . . . 72,274 32,218 9,526
--------------- ------------- ------------
Total assets . . . . . . . . . . . . . . . . . . . . . 1,487,168,843 501,911,537 53,456,125
--------------- ------------- ------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Payable for securities purchased . . . . . . . . . . . . 29,585,637 10,327,696 2,418,575
Payable for shares redeemed. . . . . . . . . . . . . . . -- 1,059,355 29,835
Payable to Bank. . . . . . . . . . . . . . . . . . . . . 22,523 -- --
Payable to Calvert Asset Management Company, Inc.. . . . 328,424 278,609 30,381
Payable to Calvert Administrative Service Company . . . . 323,329 3,615 362
Payable to Calvert Shareholders Services, Inc. . . . . . 152,305 14,308 2,059
Payable to Calvert Distributors, Inc.. . . . . . . . . . -- -- 3,888
Accrued expenses and other liabilities . . . . . . . . . 320,027 48,250 5,420
--------------- ------------- ------------
Total liabilities. . . . . . . . . . . . . . . . . . . 30,732,245 11,731,833 2,490,520
--------------- ------------- ------------
Net assets. . . . . . . . . . . . . . . . . . . . .$1,456,436,598 $490,179,704 $50,965,605
--------------- ------------- ------------
--------------- ------------- ------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------
Paid-in capital applicable to the following shares of
beneficial interest, unlimited number of no par
value shares authorized:
Money Market Portfolio
Class O:
1,405,404,125 shares outstanding . . . . . . .$1,405,291,715
Institutional Class:
51,084,219 shares outstanding. . . . . . . . . 51,081,396
Limited-Term Portfolio Class A:
45,808,410 shares outstanding . . . . . . . . . . $488,269,197
Long-Term Portfolio Class A:
2,950,226 shares outstanding. . . . . . . . . . . $46,983,660
Undistributed net investment income. . . . . . . . . . . 63,487 135,049 53,416
Accumulated net realized gain (loss) on investments. . . -- (142,749) 317,022
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . . . . . -- 1,918,207 3,611,507
--------------- ------------- ------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . .$1,456,436,598 $490,179,704 $50,965,605
--------------- ------------- ------------
--------------- ------------- ------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------
Money Market Portfolio
Class O (based on net assets of $1,405,349,877). . . . $1.00
------------
------------
Institutional Class (based on net assets of $51,086,721) $1.00
------------
------------
Limited-Term Portfolio Class A . . . . . . . . . . . . . $10.70
--------------
--------------
Long-Term Portfolio Class A. . . . . . . . . . . . . . . $17.28
-------------
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
28 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
- --------------------------------------------------------------------------------
<PAGE>
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY MARKET LIMITED-TERM LONG-TERM
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Interest income. . . . . . . . . . . . . . . . . . . . $62,616,253 $24,518,117 $3,080,086
------------- ------------- -------------
Expenses
Investment advisory fee. . . . . . . . . . . . . . . . 5,409,090 3,164,772 307,550
Transfer agency fees and expenses. . . . . . . . . . . 1,843,154 184,634 25,144
Distribution Plan expenses:
Class MMP . . . . . . . . . . . . . . . . . . . . . 59,719 -- --
Class A . . . . . . . . . . . . . . . . . . . . . . -- -- 46,132
Trustees' fees and expenses. . . . . . . . . . . . . . 210,221 72,792 7,021
Administrative fees
Class O . . . . . . . . . . . . . . . . . . . . . . 1,682,754 -- --
Institutional Class . . . . . . . . . . . . . . . . 24,010 -- --
Class A . . . . . . . . . . . . . . . . . . . . . . -- 43,210 4,158
Custodian fees . . . . . . . . . . . . . . . . . . . . 118,924 54,902 13,804
Registration fees. . . . . . . . . . . . . . . . . . . 228,044 47,659 23,873
Reports to shareholders. . . . . . . . . . . . . . . . 515,863 101,477 13,135
Professional fees. . . . . . . . . . . . . . . . . . . 58,539 19,880 1,919
Miscellaneous. . . . . . . . . . . . . . . . . . . . . 156,297 48,107 5,528
Reimbursement from Advisor
Class O . . . . . . . . . . . . . . . . . . . . . . -- -- --
Institutional Class . . . . . . . . . . . . . . . . (25,375) -- --
------------- ------------- -------------
Total expenses. . . . . . . . . . . . . . . . . . 10,281,240 3,737,433 448,264
Fees paid indirectly. . . . . . . . . . . . . . . (118,924) (54,902) (13,804)
------------- ------------- -------------
Net expenses . . . . . . . . . . . . . . . . . 10,162,316 3,682,531 434,460
------------- ------------- -------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . 52,453,937 20,835,586 2,645,626
------------- ------------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) . . . . . . . . . . . . . . . . 28,848 159,810 549,837
Change in unrealized appreciation or depreciation. . . . -- 205,433 942,620
------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS. . . . . . . . . . . . . 28,848 365,243 1,492,457
------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . $52,482,785 $21,200,829 $4,138,083
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 29
- --------------------------------------------------------------------------------
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income. . . . . . . . . . . . . . . . . $52,453,937 $57,218,223
Net realized gain (loss) . . . . . . . . . . . . . . . 28,848 33,590
--------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . 52,482,785 57,251,813
--------------- ----------------
Distributions to shareholders from
Net investment income:
Class O shares. . . . . . . . . . . . . . . . . . . (50,409,548) (56,093,159)
Institutional Class shares . . . . . . . . . . . . (2,109,318) (1,031,769)
Net realized gain on investments:
Class O shares. . . . . . . . . . . . . . . . . . . (27,838) --
Institutional Class shares. . . . . . . . . . . . . (1,010) --
--------------- ----------------
Total distributions. . . . . . . . . . . . . . . . . . (52,547,714) (57,124,928)
--------------- ----------------
Capital share transactions
Shares sold:
Class O shares. . . . . . . . . . . . . . . . . . . 3,040,009,059 4,893,871,993
Class O shares issued from merger (Note A). . . . . -- 25,561,370
Institutional Class shares . . . . . . . . . . . . 767,943,597 49,376,871
Reinvestment of distributions:
Class O shares. . . . . . . . . . . . . . . . . . . 48,300,641 53,590,469
Institutional Class shares . . . . . . . . . . . . 989,318 1,008,296
Shares redeemed:
Class O shares. . . . . . . . . . . . . . . . . . .(3,233,630,004) (5,163,255,645)
Institutional Class shares . . . . . . . . . . . . (751,001,884) (58,963,850)
--------------- ----------------
Total capital share transactions . . . . . . . . . . . (127,389,273) (198,810,496)
--------------- ----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . (127,454,202) (198,683,611)
NET ASSETS
- ------------------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . . 1,583,890,800 1,782,574,411
--------------- ----------------
End of year (including undistributed net investment
income of $63,487 and $128,416, respectively). . . . .$1,456,436,598 $1,583,890,800
--------------- ----------------
--------------- ----------------
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------
Shares sold:
Class O shares . . . . . . . . . . . . . . . . . . . . 3,040,009,059 4,893,872,122
Class O shares issued from merger (Note A) . . . . . . -- 25,561,370
Institutional Class shares . . . . . . . . . . . . . . 767,943,597 49,376,871
Reinvestment of distributions:
Class O shares . . . . . . . . . . . . . . . . . . . . 48,300,641 53,590,469
Institutional Class shares . . . . . . . . . . . . . . 989,318 1,008,296
Shares redeemed:
Class O shares . . . . . . . . . . . . . . . . . . . .(3,233,630,004) (5,163,247,502)
Institutional Class shares . . . . . . . . . . . . . . (751,001,884) (58,963,639)
--------------- ----------------
Total capital share activity . . . . . . . . . . . . . . (127,389,273) (198,802,013)
--------------- ----------------
--------------- ----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
30 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
- --------------------------------------------------------------------------------
<PAGE>
LIMITED-TERM PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . $20,835,586 $21,362,929
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . 159,810 109,135
Change in unrealized appreciation or depreciation. . . . . . . . . . . 205,433 (1,443,220)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . . 21,200,829 20,028,844
------------ ------------
Distributions to shareholders from
Net investment income:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . (20,821,712) (20,638,063)
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- (860,629)
------------ ------------
Total distributions. . . . . . . . . . . . . . . . . . . . . . . . . . (20,821,712) (21,498,692)
------------ ------------
Capital share transactions
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 286,871,063 281,591,729
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 18,545,971
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,952,842 16,001,306
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 829,298
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . (326,364,971) (241,582,307)
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- (49,338,119)
------------ ------------
Total capital share transactions . . . . . . . . . . . . . . . . . . . (22,541,066) 26,047,878
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . . . (22,161,949) 24,578,030
NET ASSETS
- ----------------------------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 512,341,653 487,763,623
------------ ------------
End of year (including undistributed net investment
income of $135,049 and $154,923, respectively) . . . . . . . . . . . . $490,179,704 $512,341,653
------------ ------------
------------ ------------
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,812,094 26,296,141
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,738,075
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,586,656 1,496,514
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 77,843
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,512,482) (22,560,453)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (4,629,558)
------------ ------------
Total capital share activity . . . . . . . . . . . . . . . . . . . . . . (2,113,732) 2,418,562
------------ ------------
------------ ------------
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 31
<PAGE>
LONG-TERM PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . $2,645,626 $2,938,135
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . 549,837 (180,586)
Change in unrealized appreciation or depreciation. . . . . . . . . . . 942,620 (1,414,590)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . . 4,138,083 1,342,959
------------ ------------
Distributions to shareholders from
Net investment income:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . (2,660,919) (2,985,717)
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- (53,884)
Net realized gain on investments:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . (61,075) (35,067)
------------ ------------
Total distributions. . . . . . . . . . . . . . . . . . . . . . . . . . (2,721,994) (3,074,668)
------------ ------------
Capital share transactions
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,996,763 7,505,675
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 846,535
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,235,768 2,461,574
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 52,534
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . . (11,628,213) (12,713,133)
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . . -- (2,513,044)
------------ ------------
Total capital share transactions . . . . . . . . . . . . . . . . . . . (3,395,682) (4,359,859)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . . . (1,979,593) (6,091,568)
NET ASSETS
- ----------------------------------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,945,198 59,036,766
------------ ------------
End of year (including undistributed net investment
income of $53,416 and $74,260, respectively) . . . . . . . . . . . . . $50,965,605 $52,945,198
------------ ------------
------------ ------------
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356,893 447,469
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 50,957
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,740 146,928
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,173
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . (688,631) (758,710)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (152,069)
------------ ------------
Total capital share activity . . . . . . . . . . . . . . . . . . . . . . (198,998) (262,252)
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: The Calvert Tax-Free Reserves (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund is comprised of five separate portfolios, three
of which are reported herein; Money Market, Limited-Term and Long-Term. The
operations of each series are accounted for separately. Each Portfolio offers
shares of beneficial interest. Money Market Class O and Institutional Class
shares are sold without a sales charge. Shares of Limited-Term and Long-Term
are sold with a maximum front-end sales charge of 1.00% for Limited-Term and
3.75% for Long-Term. On October 29, 1996, all outstanding Class C shares of
Limited-Term and Long-Term were converted into an equivalent value of Class A
shares. This transaction was a tax-free exchange and no sales charge was
applied to the Class A shares issued.
On July 29, 1997, all outstanding Class MMP shares were converted automatically
into Class O shares of the Money Market Portfolio. This transaction was a
non-taxable exchange. On August 1, 1997, Class MMP changed its name and was
converted to the Institutional Class, with a lower expected expense ratio and a
minimum initial investment of $1,000,000.
On April 26, 1996, the net assets of Calvert Tax-Free Reserves New Jersey Money
Market Portfolio ("New Jersey") were merged into Money Market Portfolio. The
acquisition was accomplished by a tax-free exchange of 25,561,370 shares of
Money Market Portfolio (valued at $25,561,370) for the 25,561,370 shares of New
Jersey outstanding at April 26, 1996. New Jersey's net assets at that date were
combined with those of Money Market Portfolio. The aggregate net assets of Money
Market Portfolio and New Jersey immediately before the acquisition were
$1,721,364,392 and $25,552,886, respectively.
SECURITY VALUATION: Municipal securities are valued utilizing the average of
bid prices or at bid prices based on a matrix system (which considers such
factors as security prices, yields, maturities and ratings) furnished by dealers
through an independent pricing service. Securities (including options) listed or
traded on a national securities exchange are valued at the last reported sale
price. All securities for Money Market are valued at amortized cost which
approximates market. Other securities and assets for which market quotations are
not available or deemed inappropriate are valued in good faith under the
direction of the Board of Trustees.
OPTIONS: Long-Term may write or purchase option securities. The option premium
is the basis for recognition of unrealized or realized gain or loss on the
option. The cost of securities acquired or the proceeds from securities sold
through the exercise of the option is adjusted by the amount of the premium.
Risks from writing or purchasing option securities arise from possible
illiquidity of the options market and the movement in the value of the
investment or in interest rates. The risk associated with purchasing options is
limited to the premium originally paid.
FUTURES CONTRACTS: Long-Term may enter into futures contracts agreeing to buy
or sell a financial instrument for a set price at a future date. The Portfolio
maintains securities with a value equal to its obligation under each contract.
Initial margin deposits of either cash or securities are made upon entering into
futures contracts; thereafter, variation margin payments are made or received
daily reflecting the change in market value. Unrealized or
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 33
<PAGE>
realized gains and losses are recognized based on the change in market value.
Risks of futures contracts arise from the possible illiquidity of the futures
markets and the movement in the value of the investment or in interest rates.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded by
the Fund on ex-dividend date. Dividends from net investment income are accrued
daily and paid monthly for Money Market; dividends from net investment income
are declared and paid monthly for Limited-Term and Long-Term. Distributions from
net realized capital gains, if any, are paid at least annually. Distributions
are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles, accordingly, periodic
reclassifications are made within the Fund's capital accounts to reflect income
and gains available for distribution under income tax regulations.
The Fund hereby designates $61,075 as capital gain dividends paid for Long-Term
Portfolio during the taxable year ended December 31, 1997. Of the amount
designated, 100% is taxable at the 20% maximum capital gain rate.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE OFFSET ARRANGEMENTS: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such a deposit arrangement is an
alternative to overnight investments.
FEDERAL INCOME TAXES: No provision for federal income or excise tax is required
since the Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code and to distribute substantially all of its
earnings.
NOTE B -- RELATED PARTY TRANSACTIONS
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Trustees of the Fund.
For its services, the Advisor receives monthly fees based on the following
annual rates of average daily net assets:
<TABLE>
<CAPTION>
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market
1/1/97-7/31/97 . . . . . . . .50% .45% .40%
8/1/97-12-31-97. . . . . . . .25% .20% .15%
Limited-Term. . . . . . . . . . . .60% .50% .40%
Long-Term . . . . . . . . . . . . .60% .50% .40%
</TABLE>
Due to the conversion of Class MMP to the Institutional Class on August 1, 1997,
the fees paid to the Advisor for the Money Market Portfolios Class O and
Institutional Class changed as reflected above.
34 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee. Due to the conversion of
Class MMP to the Institutional Class on August 1, 1997, the fee structure
changed. Prior to August 1, 1997 the Fund paid, monthly, a pro rata portion of a
$200,000 annual fee, which was allocated to all of the Portfolios of the Fund
based on their relative net assets. Effective August 1, 1997, Class O and
Institutional Class of Money Market pays annual rates of .26% and .05%,
respectively, based of their average daily net assets. The remaining portfolios
of the Fund pays monthly an annual fee, of $80,000, which is allocated between
the Portfolios based on their relative net assets.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and
principal underwriter for the Fund. Distribution Plans, adopted by Class MMP of
Money Market and Long-Term, allow the Portfolios to pay the distributor for
expenses and services associated with distribution of shares. The expenses paid
may not exceed an annual rate of average daily net assets of .35% on Long-Term.
Effective August 1, 1997, Class MMP which was converted into the Institutional
Class, terminated it Distribution Plan.
The Distributor paid $101,072 in addition to the commissions charged on sales of
Limited-Term, and received $11,019 as its portion of commissions charged on
sales of Long-Term.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Trustee who is not affiliated with the Advisor received an annual fee of
$20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
NOTE C -- INVESTMENT ACTIVITY
During the period, purchases and sales of investments, other than short-term
securities, were:
<TABLE>
<CAPTION>
LIMITED-TERM LONG-TERM
- ----------------------------------------------------------------------------
<S> <C> <C>
Purchases . . . . . . . . . . . . . . . . . . 229,949,900 20,191,199
Sales . . . . . . . . . . . . . . . . . . . . 189,346,358 28,414,696
</TABLE>
Money Market held only short-term investments.
The cost of investments owned at December 31, 1997 was substantially the same
for federal income tax and financial reporting purposes for each Portfolio. The
following table presents the components of net unrealized appreciation
(depreciation) as of December 31, 1997 and the net capital loss carryforwards as
of December 31, 1997 with expiration dates:
<TABLE>
<CAPTION>
MONEY MARKET LIMITED-TERM LONG-TERM
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Unrealized appreciation . . . . . . -- 1,918,207 3,656,079
Unrealized depreciation . . . . . . -- -- (44,572)
------------ ----------- -----------
Net. . . . . . . . . . . . . . -- 1,918,207 3,611,507
------------ ----------- -----------
------------ ----------- -----------
Capital loss carryforward . . . . . -- 142,749 --
Expiration dates. . . . . . . . . . -- 2002 --
</TABLE>
Capital loss carryforwards may be utilized to offset current and future capital
gains until expiration.
As a cash management practice, Portfolios may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 35
<PAGE>
NOTE D -- LINE OF CREDIT
Effective July 1, 1997, a financing agreement is in place with all Calvert
Group Funds and State Street Bank and Trust Company ("the Bank"). Under the
agreement, the Bank is providing an unsecured line of credit facility, in the
aggregate amount of $50 million ($25 million committed and $25 million
uncommitted), to be accessed by the Funds for temporary or emergency purposes
only. Borrowings under this facility bear interest at the overnight Federal
Funds Rate plus .50% per annum. A commitment fee of .10% per annum will be
incurred on the unused portion of the committed facility which will be
allocated to all participating funds. This fee is paid quarterly in arrears.
The Fund had no loans outstanding pursuant to this line of credit at December
31, 1997.
36 CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS O SHARES -- YEARS ENDED
---------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . .033 .033 .040 .028
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . (.033) (.033) (.040) (.028)
------------ ------------ ------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return*. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.38% 3.33% 4.02% 2.81%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . 3.32% 3.28% 3.93% 2.75%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . .65% .65% .62% --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .64% .64% .61% .62%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . $ 1,405,350 $ 1,550,731 $ 1,740,839 $ 1,344,595
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . 1,405,404 1,550,724 1,740,948 1,344,668
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
<CAPTION>
CLASS O SHARES INSTITUTIONAL CLASS/MMP++ -- PERIODS ENDED
--------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1993 1997 1996 1995^
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . .024 .031 .030 .008
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . (.024) (.031) (.030) (.008)
------------ ------------ ------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return*. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.41% 3.12% 2.68% .79%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . 2.37% 3.37% 2.65% 3.19%(a)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . -- .63% 1.29% 1.35%(a)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .60% .62% 1.28% 1.34%(a)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Expenses reimbursed. . . . . . . . . . . . . . . . . . . . . . . . -- (.04%) -- --
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . $ 1,500,614 $ 51,087 $ 33,160 $ 41,736
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . 1,500,557 51,084 33,153 41,732
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 37
<PAGE>
LIMITED-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $ 10.69 $ 10.72 $ 10.59
------------ ------------ ------------
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .42 .44 .45
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . .01 (.03) .13
------------ ------------ ------------
Total from investment operations. . . . . . . . . . . . . . . . . .43 .41 .58
------------ ------------ ------------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.42) (.44) (.45)
------------ ------------ ------------
Total increase (decrease) in net asset value . . . . . . . . . . . . . .01 (.03) .13
------------ ------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $ 10.70 $ 10.69 $ 10.72
------------ ------------ ------------
------------ ------------ ------------
Total return*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.07% 3.94% 5.55%
------------ ------------ ------------
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 3.91% 4.12% 4.21%
------------ ------------ ------------
------------ ------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . .70% .71% .71%
------------ ------------ ------------
------------ ------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69% .70% .70%
------------ ------------ ------------
------------ ------------ ------------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 52% 45% 33%
------------ ------------ ------------
------------ ------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $ 490,180 $ 512,342 $ 457,707
------------ ------------ ------------
------------ ------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 45,808 47,922 42,690
------------ ------------ ------------
------------ ------------ ------------
<CAPTION>
YEARS ENDED
---------------------------
DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1994 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $ 10.72 $ 10.68
------------ ------------
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .39 .38
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . (.13) .04
------------ ------------
Total from investment operations. . . . . . . . . . . . . . . . . .26 .42
------------ ------------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.39) (.38)
------------ ------------
Total increase (decrease) in net asset value . . . . . . . . . . . . . (.13) .04
------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $ 10.59 $ 10.72
------------ ------------
------------ ------------
Total return*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.42% 4.02%
------------ ------------
------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 3.60% 3.59%
------------ ------------
------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ ------------
------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66% .67%
------------ ------------
------------ ------------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 27% 14%
------------ ------------
------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $ 544,822 $ 663,305
------------ ------------
------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 51,424 61,861
------------ ------------
------------ ------------
</TABLE>
38 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
LIMITED-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDED
-------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
CLASS C SHARES 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $ 10.68 $ 10.56 $ 10.70
------------ ------------ ------------
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .30 .38 .27
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . (.02) .13 (.12)
------------ ------------ ------------
Total from investment operations. . . . . . . . . . . . . . . . . .28 .51 .15
------------ ------------ ------------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.31) (.39) (.29)
------------ ------------ ------------
Total increase (decrease) in net asset value . . . . . . . . . . . . . (.03) .12 (.14)
------------ ------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $ 10.65 $ 10.68 $ 10.56
------------ ------------ ------------
------------ ------------ ------------
Total return*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.63% 4.86% 1.43%
------------ ------------ ------------
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 3.45%(a) 3.57% 3.05%(a)
------------ ------------ ------------
------------ ------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . 1.43%(a) 1.35% --
------------ ------------ ------------
------------ ------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.42%(a) 1.34% 1.38%(a)
------------ ------------ ------------
------------ ------------ ------------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 27% 33% 27%
------------ ------------ ------------
------------ ------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $ 29,215 $ 30,057 $ 31,081
------------ ------------ ------------
------------ ------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 2,744 2,814 2,942
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
ANNUAL REPORT CALVERT TAX-FREE RESERVES - 39
<PAGE>
LONG-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $ 16.81 $ 17.31 $ 15.83
------------ ------------ ------------
------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .87 .93 .95
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . .50 (.46) 1.53
------------ ------------ ------------
Total from investment operations. . . . . . . . . . . . . . . . . 1.37 .47 2.48
------------ ------------ ------------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.87) (.95) (.91)
Net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . (.03) (.02) (.09)
------------ ------------ ------------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . (.90) (.97) (1.00)
------------ ------------ ------------
Total increase (decrease) in net asset value . . . . . . . . . . . . . .47 (.50) 1.48
------------ ------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $ 17.28 $ 16.81 $ 17.31
------------ ------------ ------------
------------ ------------ ------------
Total return * . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.41% 2.89% 16.05%
------------ ------------ ------------
------------ ------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 5.16% 5.50% 5.71%
------------ ------------ ------------
------------ ------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . .87% .89% .87%
------------ ------------ ------------
------------ ------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85% .86% .85%
------------ ------------ ------------
------------ ------------ ------------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 41% 41% 58%
------------ ------------ ------------
------------ ------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $ 50,966 $ 52,945 $ 57,359
------------ ------------ ------------
------------ ------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 2,950 3,149 3,314
------------ ------------ ------------
------------ ------------ ------------
<CAPTION>
YEARS ENDED
---------------------------
DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1994 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $ 17.15 $ 16.32
------------ ------------
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .93 .94
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . (1.33) .83
------------ ------------
Total from investments. . . . . . . . . . . . . . . . . . . . . . (.40) 1.77
------------ ------------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.92) (.94)
Net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ ------------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . (.92) (.94)
------------ ------------
Total increase (decrease) in net asset value . . . . . . . . . . . . . (1.32) .83
------------ ------------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $ 15.83 $ 17.15
------------ ------------
------------ ------------
Total return * . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.30%) 11.12%
------------ ------------
------------ ------------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 5.73% 5.59%
------------ ------------
------------ ------------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ ------------
------------ ------------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81% .78%
------------ ------------
------------ ------------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 98% 97%
------------ ------------
------------ ------------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $ 47,267 $ 55,204
------------ ------------
------------ ------------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 2,985 3,219
------------ ------------
------------ ------------
</TABLE>
40 - CALVERT TAX-FREE RESERVES ANNUAL REPORT
<PAGE>
LONG-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIODS ENDED
------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
CLASS C SHARES 1996 1995 1994#
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $17.13 $15.72 $16.86
-------- --------- --------
-------- --------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .52 .78 .58
Net realized and unrealized gain (loss). . . . . . . . . . . . . . . (.56) 1.46 (1.04)
-------- --------- --------
Total from investment operations. . . . . . . . . . . . . . . . . (.04) 2.24 (.46)
-------- --------- --------
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.54) (.74) (.68)
Net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . -- (.09) --
-------- --------- --------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . (.54) .83 (.68)
-------- --------- --------
Total increase (decrease) in net asset value . . . . . . . . . . . . . (.58) 1.41 (1.14)
-------- --------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $16.55 $17.13 $15.72
-------- --------- --------
-------- --------- --------
Total return * . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.17%) 14.51% (2.24%)
-------- --------- --------
-------- --------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 3.89%(a) 4.34% 3.57%(a)
-------- --------- --------
-------- --------- --------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . 2.52%(a) 2.19% --
-------- --------- --------
-------- --------- --------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.49%(a) 2.17% 2.55%(a)
-------- --------- --------
-------- --------- --------
Expenses reimbursed. . . . . . . . . . . . . . . . . . . . . . . . . (.02%)(a) -- 3.06%(a)
-------- --------- --------
-------- --------- --------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 30% 58% 98%
-------- --------- --------
-------- --------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $1,307 $1,678 $871
-------- --------- --------
-------- --------- --------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . 79 98 55
-------- --------- --------
-------- --------- --------
</TABLE>
(a) ANNUALIZED
* TOTAL RETURN DOES NOT REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
+ EFFECTIVE DECEMBER 31, 1995, THIS RATIO REFLECTS TOTAL EXPENSES BEFORE
REDUCTION FOR FEES PAID INDIRECTLY; SUCH REDUCTIONS ARE INCLUDED IN THE
RATIO OF NET EXPENSES.
^ FROM OCTOBER 2, 1995 INCEPTION.
# FROM MARCH 1, 1994 INCEPTION.
++ ON AUGUST 1, 1997, CLASS MMP CHANGED ITS NAME AND WAS CONVERTED TO THE
INSTITUTIONAL CLASS, WITH A LOWER EXPECTED EXPENSE RATIO. SEE NOTES TO
FINANCIAL STATEMENTS.
ANNUAL REPORT. . . . . . . . . . . . . . CALVERT TAX-FREE RESERVES - 41
<PAGE>
THIS PAGE IS RESERVED FOR ANY COMMENTS AND QUESTIONS.
42 - CALVERT TAX-FREE RESERVES. . . . . . . . . . . . . . ANNUAL REPORT
<PAGE>
THIS PAGE IS RESERVED FOR ANY COMMENTS AND QUESTIONS.
ANNUAL REPORT. . . . . . . . . . . . . . CALVERT TAX-FREE RESERVES - 43
<PAGE>
THIS PAGE IS RESERVED FOR ANY COMMENTS AND QUESTIONS.
44 - CALVERT TAX-FREE RESERVES. . . . . . . . . . . . . . ANNUAL REPORT
<PAGE>
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<PAGE>
CALVERT GROUP'S
FAMILY OF FUNDS
TAX-EXEMPT
MONEY MARKET FUNDS
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
TAXABLE
MONEY MARKET FUNDS
First Government Money Market Fund
CSIF Money Market Portfolio
BALANCED FUND
CSIF Managed Growth Portfolio
MUNICIPAL FUNDS
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
Arizona Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Florida Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Michigan Muni. Intermediate Portfolio
New York Muni. Intermediate Portfolio
Pennsylvania Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
TAXABLE BOND FUNDS
CSIF Bond Portfolio
Income Fund
EQUITY FUNDS
CSIF Equity Portfolio
Capital Accumulation Fund
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New Vision Small Cap Fund
New Africa Fund
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<PAGE>
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<PAGE>
DECEMBER 31, 1997
ANNUAL
REPORT
CALVERT TAX-FREE
RESERVES
[LOGO]
<PAGE>
TABLE OF CONTENTS
President's Letter 1
Portfolio Manager Remarks 2
Report of Independent Accountants 4
Statement of Net Assets 5
Statement of Operations 8
Statements of Changes in Net Assets 9
Notes to Financial Statements 10
Financial Highlights 12
Dear Investor:
Financial professionals continue to be amazed by the almost paradoxical US
economy. We've enjoyed years of consistent expansion and a declining level of
unemployment without definitive signs of higher inflation. In fact, by most
measures, price inflation has been steadily declining. Business productivity has
been increasing, boosting profit margins and earnings. These remarkable
conditions have helped fuel another leg in the long bull market. Stock price
gains have been supported all along by a long-term rally in the bond market.
It's easy to drift away from your long-term investment goals during roaring
markets. For that reason, we've been encouraging investors thrilled with the
market's recent returns to submit to an occasional reality check and make sure
their performance expectations are inline with historical norms. While that's
always sound advice, it should not cause you to believe that our long-term
forecast is anything less than optimistic.
Our positive outlook is based on two fundamental waves of change that will
continue to reshape the investment landscape. First, we believe the 20th century
inflation wave has crested and is now receding, a development that is leading to
greater price equilibrium on a global scale. This allows investors, businesses
and consumers to make more certain plans for the future, reducing uncertainty
and boosting confidence. Second, baby boomers' demand for investment products
will continue to grow as this generation approaches retirement, leading to
continued strong flows of money into the stock market and increased investment
in our bond markets. Strong demand from investors during this time of shrinking
supply of available stocks and bonds fundamentally supports securities prices
and helps cushion downturns when they occur.
Looking to the shorter-term outlook, it is likely that we will continue to
experience a high degree of volatility in the US and global stock and bond
markets. Continued uncertainty over the impact of the Asian economic crisis
means that investors may tend to be more skittish than usual. But, for informed
and patient investors, today's stock and bond markets still offer tremendous
long term potential. We appreciate your investment in Calvert Group.
Sincerely,
/s/ Barbara J. Krumsiek
Barbara J. Krumsiek
President and CEO
February 5, 1998
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 1
<PAGE>
PORTFOLIO STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS
6 MONTHS ENDED
6/30/97 12/31/97
- --------------------------------------------------------------------------------
<S> <C> <C>
California
Money Market 3.25% 3.31%
Lipper California
Tax-Exempt Money
Market Funds Average 2.67% 2.88%
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/97
- --------------------------------------------------------------------------------
39 days 46 days
</TABLE>
CREDIT QUALITY DISTRIBUTION
First Tier 92%
Second Tier 8%
ALL SECURITIES IN CALVERT GROUP MONEY MARKET FUNDS ARE ELIGIBLE SECURITIES UNDER
RULE 2a-7 OF THE INVESTMENT COMPANY ACT OF 1940. FIRST TIER SECURITIES ARE
ELIGIBLE SECURITIES RATED IN THE HIGHEST RATING CATEGORY FOR SHORT-TERM DEBT
OBLIGATIONS BY AT LEAST TWO OF THE NATIONALLY RECOGNIZED STATISTICAL RATINGS
ORGANIZATIONS. SECOND TIER SECURITIES ARE ELIGIBLE SECURITIES NOT IN THE FIRST
TIER.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
A DISCUSSION WITH PORTFOLIO MANAGER, TOM DAILEY
[Photo]
DESCRIBE MARKET CONDITIONS DURING THIS PAST YEAR.
The economy continued to expand and inflation remained tame, despite rising
wages and low unemployment. In general, short- and long-term interest rates rose
during the first quarter, then trended lower for the remainder of the year,
following the Federal Reserve's 25 basis point increase in the federal funds
rate, the rate banks charge each other for overnight loans to meet reserve
requirements, which occurred in March.
WHAT WAS YOUR STRATEGY FOR MANAGING THE CALIFORNIA MONEY MARKET PORTFOLIO, AND
HOW DID THE PORTFOLIO COMPARE TO ITS LIPPER AVERAGE?
The California Money Market Portfolio's 12-month total return was 28 basis
points above the return for the Lipper California Tax-Exempt Money Market Funds
Average. The Portfolio was ranked 7th out of 53 funds in its category.
At the end of the first quarter, we took steps to shorten the Portfolio's
average maturity to approximately 27 days to be better positioned to take
advantage of the large issuance of notes occurring over the summer months. This
increase in supply generally means higher yields for investors. During the third
quarter, we lengthened the average maturity to approximately 50 days as it
appeared that the Fed would not move rates. We were pleased to have locked in
higher rates for a longer period of time, as the Asian currency crisis created
increased demand for money market securities and caused yields to trend lower.
2 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
PORTFOLIO STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/97
- -------------------------------------------------------------
<S> <C>
One year 3.28%
Five year 3.02%
Since inception 3.67%
(10/16/89)
</TABLE>
LONG-TERM PERFORMANCE
CHANGE IN VALUE OF $10,000 INVESTMENT.
Line graph here showing comparison from 10/16/89 to 12/31/97.
CTFR California Money Market Portfolio $13,451
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
WHAT IS YOUR OUTLOOK FOR MONEY MARKET RATES?
Continued low inflation despite strong economic growth and real wage gains
kept the Fed on hold for the balance of 1997. Looking forward, the Asian
financial crisis may influence US monetary policy, as the Fed considers how a
rate change will impact jittery global economies.
The Fed continues to weigh its concerns for tight labor markets and the impact
rising wages could have on the economy against reports indicating that inflation
does not look to be much of a threat. Thus, money market rates should remain
relatively stable.
We expect the supply in California to remain constant for 1998 and interest
rates to move within a narrow range as the Fed implements its policy throughout
the year.
January 22, 1998
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Calvert Tax-Free Reserves and Shareholders of
California Money Market Portfolio:
We have audited the accompanying statement of net assets of the California Money
Market Portfolio (one of the portfolios comprising Calvert Tax-Free Reserves) as
of December 31, 1997, and the related statement of operations for the year then
ended, statements of changes in net assets for each of the two years in the
period then ended and financial highlights for each of the four years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended December 31, 1993 were
audited by other auditors whose report dated January 31, 1994 expressed an
unqualified opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
California Money Market Portfolio as of December 31, 1997, the results of its
operations, the changes in its net assets and financial highlights for the
respective periods stated in the first paragraph, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
4 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS - 98.0% AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA - 90.4%
California Buena Park Community Development Authority VRDN,
5.355%, 12/28/99, GA: Mass Mutual Life Insurance . . . . . . . . $5,900,000 $5,900,000
California Housing Finance Agency Revenue VRDN, 3.80%,
8/1/10, TOA: Citibank, INSUR: MBIA. . . . . . . . . . . . . . . 2,410,000 2,410,000
California Schools Cash Reserve Program Authority Series A Notes,
4.75%, 7/298, INSUR: AMBAC . . . . . . . . . . . . . . . . . . . 6,000,000 6,027,084
California State Custodial Receipts 1992 Series A VRDN, 3.80%,
10/1/07, TOA: FNB Chicago, INSUR: MBIA. . . . . . . . . . . . . 4,825,000 4,825,000
California State Revenue Anticipation Notes, 4.50%, 6/30/98. . . . . . 6,400,000 6,421,493
California Statewide Community Development Authority
Multi-Family Revenue VRDN, 4.05%, 7/1/27,
LOC: Banque Paribas . . . . . . . . . . . . . . . . . . . . . . . 5,070,000 5,070,000
California Valleys Housing Finance Authority Revenue Bonds,
4.90%, 7/1/25, LOC: Sumitomo Bank, Ltd.. . . . . . . . . . . . . 14,000,000 14,000,000
Fresno Multi-Family Housing VRDN, 4.55%, 5/1/15,
LOC: Tokai Bank Ltd. . . . . . . . . . . . . . . . . . . . . . . 1,188,000 1,188,000
Glendora Industrial Development Authority VRDN, 4.665%,
12/1/16, LOC: Union Bank of California . . . . . . . . . . . . . 3,025,000 3,025,000
Hemet Multi-Family Housing Authority VRDN, 3.90%, 7/1/06,
LOC: FNB Boston . . . . . . . . . . . . . . . . . . . . . . . . . 12,050,000 12,050,000
Los Angeles Convention & Exhibition Center Revenue VRDN,
4.10%, 8/15/18, BPA: Merrill Lynch, INSUR: MBIA . . . . . . . . 13,500,000 13,500,000
Los Angeles Multi-Family Housing Revenue VRDN, 4.95%,
8/1/19, LOC: Fuji Bank Ltd.. . . . . . . . . . . . . . . . . . . 8,600,000 8,600,000
Los Angeles Tax & Revenue Anticipation Notes,
4.50%, 6/30/98. . . . . . . . . . . . . . . . . . . . . . . . . . 15,500,000 15,546,707
Los Angeles Transportation Community Sales Tax Revenue Bonds,
3.60%, 8/20/03, LOC: Credit Suisse, INSUR: MBIA . . . . . . . . 6,000,000 6,000,000
Midway School District COPs, 4.00%, 2/1/23,
LOC: Union Bank of California. . . . . . . . . . . . . . . . . . 4,965,000 4,965,000
Oceanside Multi-Family Housing VRDN, 4.40%, 8/1/17,
SURBD: Continental Casualty Co.. . . . . . . . . . . . . . . . . 6,540,000 6,540,000
Orange County Apartment Development Revenue VRDN:
4.20%, 11/1/05, LOC: Wells Fargo Bank, NA. . . . . . . . . . . . 26,650,000 26,650,000
4.80%, 3/1/07, LOC: Tokai Bank Ltd.. . . . . . . . . . . . . . . 6,050,000 6,050,000
4.35%, 8/15/07, LOC: Tokai Bank Ltd. . . . . . . . . . . . . . . 3,200,000 3,200,000
4.35%, 10/1/07, LOC: Bank of Tokyo-Mitsubishi, Ltd.. . . . . . . 4,800,000 4,800,000
4.15%, 11/1/08, LOC: Banque Paribas. . . . . . . . . . . . . . . 9,400,000 9,400,000
Orange County Multi-Family Housing Authority VRDN, 3.95%,
5/1/22, LOC: Banque Paribas. . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Palmdale School District Project Lease VRDN:
4.45%, 12/13/10, LOC: National Westminster Bank. . . . . . . . . 5,449,999 5,449,999
4.30%, 12/13/10, LOC: National Westminster Bank. . . . . . . . . 2,237,143 2,237,143
Paramount Multi-Family Housing Authority VRDN, 4.72%,
10/1/18, LOC: Heller Financial . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
</TABLE>
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 5
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Pitney Bowes Credit Corporation LeaseTOPS Trust Certificates:
4.10%, 4/1/98, BPA: Pitney Bowes Credit Corporation . . . . . . . . $8,243,360 $8,243,360
4.10%, 2/11/11, BPA: Pitney Bowes Credit Corporation,
LOC: Landesbank Hessen. . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Riverside Multi-Family Housing VRDN, 4.30%, 6/1/09,
LOC: Tokai Bank Ltd.. . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
Riverside Tax and Revenue Anticipation Notes, 4.50%, 6/30/98 . . . . . 5,000,000 5,013,030
San Bernardino COPs, 4.15%, 3/1/24 . . . . . . . . . . . . . . . . . . 3,500,000 3,500,000
San Bernardino Tax & Revenue Anticipation Notes, Series A,
4.50%, 6/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,900,000 10,934,871
San Bernardino Multi-Family Housing Revenue VRDN:
4.25%, 6/1/05, LOC: Household Federal Savings . . . . . . . . . . . 2,000,000 2,000,000
6.05%, 5/1/15, IA: Escrowed/Treasury Bills. . . . . . . . . . . . . 5,000,000 5,000,000
San Francisco Redevelopment Multi-Family Housing VRDN:
4.80%, 10/1/00, LOC: Mitsubishi Trust & Banking . . . . . . . . . . 11,100,000 11,100,000
4.25%, 12/1/05, LOC: Industrial Bank of Japan . . . . . . . . . . . 7,500,000 7,500,000
San Jose Financing Authority Revenue VRDN, 4.20%, 12/1/25,
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . 2,945,000 2,945,000
San Marcos Industrial Development Authority VRDN, 4.57%,
12/1/20, LOC: Union Bank of California. . . . . . . . . . . . . . . 1,790,000 1,790,000
San Marcos Redevelopment VRDN, 4.165%, 12/1/10,
LOC: Bank of America. . . . . . . . . . . . . . . . . . . . . . . . 1,800,000 1,800,000
Santa Paula Public Financing Authority Revenue VRDN,
4.15%, 2/1/26, LOC: Sumitomo Bank, Ltd., Confirming
LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . . . . . . . 6,900,000 6,900,000
Simi Valley Multi-Family Housing Revenue Authority VRDN,
4.655%, 6/1/10, LOC: Sumitomo Trust & Banking,
Confirming LOC: Sumitomo Bank, Ltd. . . . . . . . . . . . . . . . . 4,000,000 4,000,000
Stockton County Industrial Development Revenue VRDN,
4.58%, 12/1/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 700,000
Stockton County Nursing Home VRDN, 4.665%, 12/1/16,
LOC: Union Bank of California . . . . . . . . . . . . . . . . . . . 2,680,000 2,680,000
Stockton Heritage Convalescent Center Project VRDN, 5.95%,
12/1/05, LOC: Tokai Bank Ltd. . . . . . . . . . . . . . . . . . . . 1,165,000 1,165,000
Union City Multi-Family Housing Authority Revenue VRDN,
4.50%, 10/1/07, LOC: Credit Lyonnais, Confirming
LOC: Den Danske Bank . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Ventura County Tax & Revenue Anticipation Notes,
4.50%, 7/1/98. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,900,000 7,922,777
Victor Valley Community College COPs VRDN,
4.45%, 8/01/26, LOC: Banque National de Paris . . . . . . . . . . . 6,300,000 6,300,000
Victor Valley Community College Revenue VRDN, 4.10%,
11/1/24, GA: Anchor National Life . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
Victorville Multi-Family Housing Revenue VRDN, 4.30%,
12/1/15, C/LOC: Redlands S&L. . . . . . . . . . . . . . . . . . . . 2,875,000 2,875,000
</TABLE>
6 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
OTHER OBLIGATIONS (7.6%)
Puerto Rico Commonwealth Tax & Revenue Anticipation Notes,
4.50%, 7/30/98 . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,000,000 $14,061,557
Puerto Rico Electric Power Authority GO Bonds,
3.55%, 7/1/22, BPA: Societe Generale, INSUR: MBIA. . . . . . . . . 10,500,000 10,500,000
Total Municipal Obligations (Cost $314,686,021). . . . . . . . . . . . 314,686,021
------------
TOTAL INVESTMENTS (Cost $314,686,021) - 98.0%. . . . . . . . . . . . 314,686,021
Other assets and liabilities, net - 2.0% . . . . . . . . . . . . . . 6,315,274
------------
NET ASSETS 100%. . . . . . . . . . . . . . . . . . . . . . . . . . . $321,001,295
------------
------------
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------------------------
Paid in capital applicable to 321,125,930 shares of beneficial
interest, unlimited number of no par shares authorized . . . . . . . $321,125,971
Undistributed net investment income. . . . . . . . . . . . . . . . . . 6,996
Accumulated realized gain (loss) on investments. . . . . . . . . . . . (131,672)
------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $321,001,295
------------
------------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . . . . . . . . . . $1.00
------------
------------
</TABLE>
EXPLANATION OF GUARANTEES:
BPA: BOND-PURCHASE AGREEMENT LOC: LETTER OF CREDIT
GA: GUARANTY AGREEMENT C/LOC: COLLATERALIZED LOC
IA: INVESTMENT AGREEMENT SURBD: SURETY BOND
INSUR: INSURANCE TOA: TENDER OPTION AGREEMENT
ABBREVIATIONS:
GO: GENERAL OBLIGATION
COPS: CERTIFICATES OF PARTICIPATION
VRDN: VARIABLE RATE DEMAND NOTE
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 7
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NET INVESTMENT INCOME
- -------------------------------------------------------------------------------
<S> <C>
Investment Income
Interest income. . . . . . . . . . . . . . . . . . . . . . . .$12,729,652
-----------
Expenses
Investment advisory fee. . . . . . . . . . . . . . . . . . . . .1,643,147
Transfer agency fees and expenses. . . . . . . . . . . . . . . . .398,822
Trustees' fees and expenses. . . . . . . . . . . . . . . . . . . . 45,564
Administrative fees. . . . . . . . . . . . . . . . . . . . . . . . 26,655
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . 24,011
Registration fees. . . . . . . . . . . . . . . . . . . . . . . . . 12,573
Reports to shareholders. . . . . . . . . . . . . . . . . . . . . .136,830
Professional fees. . . . . . . . . . . . . . . . . . . . . . . . . 12,245
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 34,438
Reimbursement from Advisor . . . . . . . . . . . . . . . . . . . (164,315)
-----------
Total expenses. . . . . . . . . . . . . . . . . . . . . . . .2,169,970
Fees paid indirectly. . . . . . . . . . . . . . . . . . . . . .(24,011)
-----------
Net expenses. . . . . . . . . . . . . . . . . . . . . . . .2,145,959
-----------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . 10,583,693
-----------
REALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . 12,061
-----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . .$10,595,754
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income. . . . . . . . . . . $10,583,693 $10,613,397
Net realized gain (loss) on securities . . 12,061 (351)
------------- ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . 10,595,754 10,613,046
------------- ------------
Distributions to shareholders from
Net investment income. . . . . . . . . . . (10,603,640) (10,536,345)
------------- ------------
Capital share transactions
Shares sold. . . . . . . . . . . . . . . . 373,188,095 459,651,341
Reinvestment of distributions. . . . . . . 10,433,911 10,313,443
Shares redeemed. . . . . . . . . . . . . . (408,620,397) (424,384,914)
------------- ------------
Total capital share transactions. . . . (24,998,391) 45,579,870
------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . (25,006,277) 45,656,571
NET ASSETS
- ----------------------------------------------------------------------------
Beginning of year. . . . . . . . . . . . . . 346,007,572 300,351,001
------------- ------------
End of year (including undistributed net
investment income of $6,996 and $26,943,
respectively) . . . . . . . . . . . . . . $321,001,295 $346,007,572
------------- ------------
------------- ------------
SHARE ACTIVITY
- ----------------------------------------------------------------------------
Shares sold. . . . . . . . . . . . . . . . . 373,188,095 459,651,341
Reinvestment of distributions. . . . . . . . .10,433,911 10,313,443
Shares redeemed. . . . . . . . . . . . . . . (408,620,397) (424,384,914)
------------- ------------
Net share activity . . . . . . . . . . . . (24,998,391) 45,579,870
------------- ------------
------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: The California Money Market Portfolio (the "Portfolio"), a series of
Calvert Tax-Free Reserves (the "Fund"), is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company.
The operations of each series are accounted for separately. The Portfolio offers
shares of beneficial interest to the public with no sales charges.
SECURITY VALUATION: Securities are valued at amortized cost which approximates
market.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded by
the Portfolio on ex-dividend date. Dividends from net investment income are
earned daily and paid monthly. Distributions from net realized capital gains, if
any, are paid at least annually. Distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles, accordingly, periodic reclassifications are made within the
Portfolio's capital accounts to reflect income and gains available for
distribution under income tax regulations.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE OFFSET ARRANGEMENTS: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees are paid indirectly by credits
earned on the Portfolios' cash on deposit with the bank. Such a deposit
arrangement is an alternative to overnight investments.
FEDERAL INCOME TAXES: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
NOTE B -- RELATED PARTY TRANSACTIONS
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Trustees of the Fund.
For its services, the Advisor receives a monthly fee based on the following
annual rates of average daily net assets: .50% on the first $500 million, .45%
on the next $500 million and .40% on the excess of $1 billion.
The Advisor voluntarily reimbursed the Fund for advisory fees, administrative
fees, and other operating expenses of $164,315.
Calvert Administrative Services Company, an affiliate of the Advisor, provides
administrative services to the Fund for an annual fee. Prior to August 1, 1997,
the Fund
10 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
paid, monthly, a pro rata portion of a $200,000 annual fee, which was allocated
to all of the Portfolios of the Fund based on their relative net assets.
Effective August 1, 1997, the Fund (exclusive of Money Market portfolios, Class
O and Institutional Class) pays monthly an annual fee of $80,000, which is
allocated between the Portfolios based on their relative net assets.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and
principal underwriter for the Portfolio.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Each Trustee who is not affiliated with the Advisor received an annual fee of
$20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
NOTE C -- INVESTMENT ACTIVITY
The cost of investments owned at December 31, 1997 was substantially the same
for federal income tax and financial reporting purposes. Net capital loss
carryforwards, for federal income tax purposes, of $131,672 at December 31, 1997
may be utilized to offset current and future capital gains until expiration
through 2004.
As a cash management practice, the Portfolio may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
NOTE D -- LINE OF CREDIT
Effective July 1, 1997, a financing agreement is in place with all Calvert Group
Funds and State Street Bank and Trust Company ("the Bank"). Under the agreement,
the Bank is providing an unsecured line of credit facility, in the aggregate
amount of $50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings under
this facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused portion
of the committed facility which will be allocated to all participating funds.
This fee is paid quarterly in arrears. The Fund had no loans outstanding
pursuant to this line of credit at December 31, 1997.
ANNUAL REPORT CTFR CALIFORNIA MONEY MARKET PORTFOLIO - 11
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . $1.00 $1.00 $1.00
-------- -------- --------
-------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . .032 .031 .037
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . (.032) (.031) (.037)
-------- -------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . $1.00 $1.00 $1.00
-------- -------- --------
-------- -------- --------
Total return . . . . . . . . . . . . . . . . . . . 3.28% 3.17% 3.78%*
-------- -------- --------
-------- -------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . 3.22% 3.14% 3.69%
-------- -------- --------
-------- -------- --------
Total expenses + . . . . . . . . . . . . . . . . .66% .69% .76%
-------- -------- --------
-------- -------- --------
Net expenses . . . . . . . . . . . . . . . . . . .65% .68% .75%
-------- -------- --------
-------- -------- --------
Expenses reimbursed. . . . . . . . . . . . . . . .05% .03% --
-------- -------- --------
-------- -------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . $321,001 $346,008 $300,351
-------- -------- --------
-------- -------- --------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . 321,126 346,124 300,544
-------- -------- --------
-------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------
DECEMBER 31, DECEMBER 31,
1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $1.00 $1.00
-------- --------
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . .026 .022
DISTRIBUTIONS FROM
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . (.026) (.022)
-------- --------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $1.00 $1.00
-------- --------
-------- --------
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.62% * 2.26%
-------- --------
-------- --------
RATIOS TO AVERAGE NET ASSETS:
Net investment income. . . . . . . . . . . . . . . . . . . . . . . . 2.55% 2.22%
-------- --------
-------- --------
Total expenses + . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
-------- --------
-------- --------
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69% .69%
-------- --------
-------- --------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $260,719 $296,984
-------- --------
-------- --------
Number of shares outstanding,
ending (in thousands). . . . . . . . . . . . . . . . . . . . . . . . . 260,716 296,984
-------- --------
-------- --------
</TABLE>
* TOTAL RETURN NUMBERS DO NOT REFLECT THE TENDER OPTION AGREEMENT. ON
DECEMBER 15, 1994, THE PORTFOLIO ENTERED INTO A TENDER OPTION AGREEMENT
WITH THE ADVISOR VALUED AT $600,000 TO SECURE PAYMENT OF AN "AT RISK"
INVESTMENT. ON JUNE 30, 1995, THE INVESTMENT PAID THE PORTFOLIO IN FULL AND
THE OPTION EXPIRED UNUSED. THE EXPIRATION LOSS WAS APPLIED AGAINST THE
ADVISOR'S CAPITAL CONTRIBUTION OF THE OPTION.
+ EFFECTIVE DECEMBER 31, 1995, THIS RATIO REFLECTS TOTAL EXPENSES BEFORE
REDUCTION FOR FEES PAID INDIRECTLY; SUCH REDUCTIONS ARE INCLUDED IN THE
RATIO OF NET EXPENSES.
12 - CTFR CALIFORNIA MONEY MARKET PORTFOLIO ANNUAL REPORT
<PAGE>
CALVERT
TAX-FREE RESERVES
CALIFORNIA
MONEY MARKET
PORTFOLIO
[LOGO]
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
CALVERT GROUP
INFORMATION
TO OPEN AN ACCOUNT
800-368-2748
YIELDS AND PRICES
Calvert Information Network
(24 HOURS, 7 DAYS A WEEK)
800-368-2745
SERVICE FOR EXISTING ACCOUNT
Shareholders: 800-368-2745
Brokers: 800-368-2746
TDD FOR HEARING IMPAIRED
800-541-1524
BRANCH OFFICE
4550 Montgomery Avenue
Suite 1000 North
Bethesda, Maryland 20814
REGISTERED, CERTIFIED
OR OVERNIGHT MAIL
Calvert Group
c/o NFDS, 6th Floor
1004 Baltimore
Kansas City, MO 64105-1807
WEB SITE
http://www.calvertgroup.com
Please check the inside back cover for
Calvert Group's Family of Funds.
THIS REPORT IS INTENDED TO PROVIDE FUND
INFORMATION TO SHAREHOLDERS. IT IS NOT AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
<PAGE>
[LOGO]
printed on recycled paper
using soy-based inks
CALVERT GROUP'S
FAMILY OF FUNDS
TAX-EXEMPT
MONEY MARKET FUNDS
CTFR Money Market Portfolio
CTFR California Money Market Portfolio
TAXABLE
MONEY MARKET FUNDS
First Government Money Market Fund
CSIF Money Market Portfolio
BALANCED FUND
CSIF Managed Growth Portfolio
MUNICIPAL FUNDS
CTFR Limited-Term Portfolio
CTFR Long-Term Portfolio
CTFR Vermont Municipal Portfolio
National Muni. Intermediate Portfolio
Arizona Muni. Intermediate Portfolio
California Muni. Intermediate Portfolio
Florida Muni. Intermediate Portfolio
Maryland Muni. Intermediate Portfolio
Michigan Muni. Intermediate Portfolio
New York Muni. Intermediate Portfolio
Pennsylvania Muni. Intermediate Portfolio
Virginia Muni. Intermediate Portfolio
TAXABLE BOND FUNDS
CSIF Bond Portfolio
Income Fund
EQUITY FUNDS
CSIF Equity Portfolio
Capital Accumulation Fund
CWV International Equity Fund
New Vision Small Cap Fund
New Africa Fund
<PAGE>
BULK RATE
U.S. POSTAGE
PAID
Permit No. 7470
Baltimore, MD
[LOGO]
4550 MONTGOMERY AVENUE
SUITE 1000 NORTH
BETHESDA, MARYLAND 20814
<PAGE>
DECEMBER 31, 1997
ANNUAL
REPORT
CALVERT TAX-FREE
RESERVES CALIFORNIA
MONEY MARKET
PORTFOLIO
[LOGO]
<PAGE>
TABLE OF
CONTENTS
President's Letter
1
Portfolio
Manager Remarks
2
Report of
Independent Accountants
4
Statement of
Net Assets
5
Statement
of Operations
7
Statements
of Changes in
Net Assets
8
Notes to
Financial Statements
9
Financial Highlights
12
[PHOTO] Dear Investor:
Financial professionals continue to be amazed by the almost
paradoxical US economy. We've enjoyed years of consistent expansion
and a declining level of unemployment without definitive signs of
higher inflation. In fact, by most measures, price inflation has been steadily
declining. Business productivity has been increasing, boosting profit margins
and earnings. These remarkable conditions have helped fuel another leg in the
long bull market. Stock price gains have been supported all along by a long-term
rally in the bond market.
It's easy to drift away from your long-term investment goals during roaring
markets. For that reason, we've been encouraging investors thrilled with the
market's recent returns to submit to an occasional reality check and make sure
their performance expectations are inline with historical norms. While that's
always sound advice, it should not cause you to believe that our long-term
forecast is anything less than optimistic.
Our positive outlook is based on two fundamental waves of change that will
continue to reshape the investment landscape. First, we believe the 20th century
inflation wave has crested and is now receding, a development that is leading to
greater price equilibrium on a global scale. This allows investors, businesses
and consumers to make more certain plans for the future, reducing uncertainty
and boosting confidence. Second, baby boomers' demand for investment products
will continue to grow as this generation approaches retirement, leading to
continued strong flows of money into the stock market and increased investment
in our bond markets. Strong demand from investors during this time of shrinking
supply of available stocks and bonds fundamentally supports securities prices
and helps cushion downturns when they occur.
Looking to the shorter-term outlook, it is likely that we will continue to
experience a high degree of volatility in the US and global stock and bond
markets. Continued uncertainty over the impact of the Asian economic crisis
means that investors may tend to be more skittish than usual. But, for informed
and patient investors, today's stock and bond markets still offer tremendous
long term potential. We appreciate your investment in Calvert Group.
Sincerely,
/s/Barbara J. Krumsiek
President and CEO
February 5, 1998
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 1
<PAGE>
[Q & A GRAPHIC]
<TABLE>
<CAPTION>
PORTFOLIO STATISTICS
DECEMBER 31, 1997
INVESTMENT PERFORMANCE
6 MONTHS 12 MONTHS
- ---------------------------------------------------------------------------
<S> <C> <C>
Vermont Municipal 4.63% 6.90%
Lehman Municipal
Bond Index TR 5.81% 9.19%
Lipper Other States
Municipal Debt
Funds Average 5.34% 8.44%
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/97
- ---------------------------------------------------------------------------
13 years 15 years
SEC YIELDS
30 DAYS ENDED
6/30/97 12/31/97
- ---------------------------------------------------------------------------
4.32% 4.32%
</TABLE>
CREDIT QUALITY DISTRIBUTION
[PIE CHART]
<TABLE>
<S> <C>
AAA 57%
AA 29%
BBB 3%
A 8%
CASH EQUIVALENTS 3%
</TABLE>
INVESTMENT PERFORMANCE DOES NOT REFLECT THE DEDUCTION OF ANY FRONT-END SALES
CHARGE.
TR REPRESENTS TOTAL RETURN.
YIELDS ASSUME REINVESTMENT OF DIVIDENDS.
SOURCE: LIPPER ANALYTICAL SERVICES, INC.
[PHOTO] A DISCUSSION
WITH
SENIOR VICE
PRESIDENT,
DAVE ROCHAT
DESCRIBE MARKET CONDITIONS DURING THIS
PAST YEAR.
The economy continued to expand and inflation remained tame, despite rising
wages and low unemployment. While this can be favorable, it caused confusion
because historically inflation accompanies a rapidly expanding economy and/or
rising wages. In general, both short- and long-term interest rates rose until
March when the Federal Reserve raised the fed funds rate. This is the rate banks
charge each other for overnight loans to meet reserve requirements. Mixed
economic indicators combined with the market's slow acceptance of no visible
inflationary pressures caused rate volatility until mid-year. Rates trended
lower throughout the rest of the year, especially long-term rates which closed
near the lows of November 1993. By year end the yield curve was relatively flat.
The yield curve is a graph showing the relationship between bond yields and
maturities. It's usually positively sloped, indicating that higher yields are
paid on longer-term securities. A flat yield curve can suggest that investors
are not overly concerned about rising inflation.
HOW DID THE PORTFOLIO PERFORM AND WHAT WAS YOUR APPROACH?
We tend to manage the Portfolio as an intermediate- to long-term fund rather
than a traditional long-term fund, putting a bit more emphasis on price
stability over yield. During this period, our more conservative approach caused
us to underperform the Lipper average.
We should also point out that our strategy is somewhat defined by the limited
universe of available securities, rather than our preference
2 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
[Q & A GRAPHIC]
PORTFOLIO STATISTICS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
AS OF 12/31/97
- -----------------------------------------------------------------
<S> <C>
One year 2.87%
Five year 5.66%
Since inception 6.59%
(4/1/91)
</TABLE>
PERFORMANCE COMPARISON
COMPARISON IN CHANGE OF VALUE OF $10,000 INVESTMENT.
Line graph here showing comparison from 4/1/91 to 12/31/97.
CTFR Vermont Municipal Portfolio $15,393
Lehman Municipal Bond Index TR $17,018
TOTAL RETURNS ASSUME REINVESTMENT OF DIVIDENDS AND REFLECT THE DEDUCTION OF
FUND'S MAXIMUM FRONT-END SALES CHARGE OF 3.75%. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDEX USED FOR COMPARISON.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
for one security over another. This is the case for a number of state-specific
funds.
As a way of enhancing yield without taking on an undue level of principal risk,
we added securities issued in the US territories of Guam and Puerto Rico. For
Vermont residents, income generated by these securities is exempt from federal
and state tax.
WHAT'S YOUR OUTLOOK FOR THE BOND MARKET?
We remain bullish on the bond market. We expect economic activity to be moderate
and inflation to remain in check. Without the threat of inflation, interest
rates should remain low. And, as most measures of inflation remain low, any
action by the Fed is likely to be modest. However, the financial crisis in Asia
may cause the Fed to delay any action that could possibly disrupt world
economies.
Specifically with respect to Vermont, we believe that supply should remain
constant to previous years. We'll look for gradually lower rates throughout
1998.
January 22, 1998
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Calvert Tax-Free Reserves and Shareholders of
Vermont Municipal Portfolio:
We have audited the accompanying statement of net assets of Vermont Municipal
Portfolio (one of the portfolios comprising Calvert Tax-Free Reserves) as of
December 31, 1997, and the related statement of operations for the year then
ended, statement of changes in net assets for each of the two years in the
period then ended and financial highlights for each of the four years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended December 31, 1993 were
audited by other auditors whose report dated January 31, 1994 expressed an
unqualified opinion thereon.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Vermont Municipal Portfolio as of December 31, 1997, the results of its
operations, the changes in its net assets and financial highlights for the
respective periods stated in the first paragraph, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 6, 1998
4 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
PRINCIPAL
MUNICIPAL OBLIGATIONS - 100.3% AMOUNT VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
VERMONT MUNICIPAL OBLIGATIONS - 88.5%
Burlington Electric Revenue Bonds, 6.25%, 7/1/14,
MBIA Insured. . . . . . . . . . . . . . . . . . . . . . $2,000,000 $2,178,160
Burlington VT GO Bond, 6.50%, 5/1/02 . . . . . . . . . . . . 700,000 722,764
Chittenden Solid Waste District GO Bond,
6.60%, 1/1/12, Asset Guaranty Insured . . . . . . . . . 2,000,000 2,199,300
Rutland County Solid Waste GO Bonds:
5.80%, 11/1/99. . . . . . . . . . . . . . . . . . . . . 110,000 113,367
5.95%, 11/1/00. . . . . . . . . . . . . . . . . . . . . 110,000 115,265
6.10%, 11/1/01. . . . . . . . . . . . . . . . . . . . . 110,000 117,282
6.25%, 11/2/01. . . . . . . . . . . . . . . . . . . . . 110,000 119,414
6.35%, 11/1/03. . . . . . . . . . . . . . . . . . . . . 110,000 121,159
6.45%, 11/1/04. . . . . . . . . . . . . . . . . . . . . 110,000 122,833
6.50%, 11/1/05. . . . . . . . . . . . . . . . . . . . . 105,000 118,430
6.55%, 11/1/06. . . . . . . . . . . . . . . . . . . . . 100,000 114,094
6.60%, 11/1/07. . . . . . . . . . . . . . . . . . . . . 100,000 115,327
6.70%, 11/1/08. . . . . . . . . . . . . . . . . . . . . 100,000 116,791
6.75%, 11/1/09. . . . . . . . . . . . . . . . . . . . . 100,000 118,037
6.80%, 11/1/10. . . . . . . . . . . . . . . . . . . . . 100,000 118,714
6.80%, 11/1/11. . . . . . . . . . . . . . . . . . . . . 100,000 118,873
6.85%, 11/1/12. . . . . . . . . . . . . . . . . . . . . 100,000 119,112
Vermont Education and Health - Buildings Agency, 4.20%,
6/1/05, LOC: FNB Boston . . . . . . . . . . . . . . . . 900,000 900,000
Vermont Education and Health - Central Vermont Hospital,
7.00%, 10/1/22, (Prerefunded) . . . . . . . . . . . . . 1,800,000 2,041,470
Vermont Education and Health - Central Vermont Hospital,
5.00%, 11/15/15, AMBAC Insured. . . . . . . . . . . . . 2,000,000 1,979,160
Vermont Education and Health - Lyndon Institute Project,
6.60%, 12/1/14. . . . . . . . . . . . . . . . . . . . . 1,000,000 1,100,160
Vermont Education and Health - Middlebury College,
5.50%, 11/1/16. . . . . . . . . . . . . . . . . . . . . 3,000,000 3,088,620
Vermont Education and Health - Northwestern Medical Center,
6.25%, 9/1/18 . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,106,520
Vermont Education and Health - Norwich University,
5.75%, 9/1/05 . . . . . . . . . . . . . . . . . . . . . 580,000 618,396
Vermont Education and Health - Norwich University,
6.00%, 9/1/13 . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,560,525
Vermont Education and Health - Southwest Medical Center,
5.625%, 10/1/25, FSA Insured. . . . . . . . . . . . . . 1,000,000 1,035,190
Vermont Education and Health - Vermont Medical Center Bonds,
6.00%, 9/1/22, FGIC Insured . . . . . . . . . . . . . . 750,000 804,052
Vermont Housing Finance Authority Single Family Series 2
Housing Bonds, 7.20%, 11/1/11 . . . . . . . . . . . . . 1,200,000 1,265,544
Vermont IDA Revenue Bonds VRDN, 5.775%, 12/1/01,
LOC: Vermont National Bank. . . . . . . . . . . . . . . 1,100,000 1,100,000
Vermont Municipal Bond Bank Revenue Bonds:
Series 2, 5.50%, 12/1/22, AMBAC Insured . . . . . . . . 4,000,000 4,110,600
Vermont State Colleges Revenue Bonds, 5.125%, 7/1/18 . . . . 1,000,000 972,190
</TABLE>
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 5
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MUNICIPAL OBLIGATIONS (CONT'D) AMOUNT VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Vermont State GO Bonds:
Series A, 5.70%, 1/15/00. . . . . . . . . . . . . . . . $1,500,000 $1,552,395
6.50%, 2/1/01 . . . . . . . . . . . . . . . . . . . . . 1,740,000 1,865,976
Series A, 6.30%, 1/15/06. . . . . . . . . . . . . . . . 2,500,000 2,831,300
6.50%, 2/1/07, (Prerefunded). . . . . . . . . . . . . . 500,000 543,880
6.40%, 2/1/08 . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,101,100
Series C, Zero Coupon, 8/1/08. . . . . . . . . . . . . 400,000 247,956
Series C, Zero Coupon, 8/1/09 . . . . . . . . . . . . . 300,000 175,749
6.45%, 2/1/12 . . . . . . . . . . . . . . . . . . . . . 1,950,000 2,150,772
Vermont Student Assistance Corporation Education
Loan Revenue Bonds,
Series A, 6.50%, 6/15/00, AMBAC Insured. . . . . . 2,000,000 2,104,360
Series A-3, 6.50%, 12/15/05, FSA Insured . . . . . 2,240,000 2,409,546
OTHER MUNICIPAL OBLIGATIONS - 11.8%
Guam Government Limited Obligation Revenue Bonds,
5.00%, 11/1/17. . . . . . . . . . . . . . . . . . . . . 2,500,000 2,488,000
Puerto Rico Commonwealth Infrastructure Financing Authority
Revenue Bonds, Series A, 5.00%, 7/1/21. . . . . . . . . 1,500,000 1,473,555
Puerto Rico Public Buildings Authority Revenue Bonds,
5.00%, 7/1/27 . . . . . . . . . . . . . . . . . . . . . 2,000,000 1,960,700
--------------
Total Municipal Obligations (Cost $47,197,771) . . . . . . . 50,336,638
--------------
<CAPTION>
OPTIONS PURCHASED - 0.0% CONTRACTS
- --------------------------------------------------------------------------------------------
<S> <C> <C>
June 112 Put Options on U.S. Treasury Bond Futures,
Expiration 5/15/98. . . . . . . . . . . . . . . . . . . 25 9,766
--------------
Total Options (Cost $20,170) . . . . . . . . . . . . . . . . 9,766
--------------
TOTAL INVESTMENTS (Cost $47,217,941) - 100.3% 50,346,404
Other assets and liabilities, net - (0.3%). . (152,552)
--------------
NET ASSETS - 100% . . . . . . . . . . . . . . $50,193,852
--------------
--------------
<CAPTION>
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------------------
<S> <C>
Paid-in capital applicable to 3,052,118 Class A shares of
beneficial interest, unlimited number of no par
shares authorized:. . . . . . . . . . . . . . . . . . . $46,688,016
Undistributed net investment income. . . . . . . . . . . . . 181,139
Accumulated net realized gain (loss) on investments. . . . . 196,234
Net unrealized appreciation (depreciation) on investments. . 3,128,463
--------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $50,193,852
--------------
--------------
NET ASSET VALUE PER SHARE. . . . . . . . . . . . . $16.45
--------------
--------------
</TABLE>
ABBREVIATIONS:
AMBAC - AMBAC INDEMNITY CORPORATION FSA - FINANCIAL SECURITY
FGIC - FINANCIAL GUARANTY INSURANCE COMPANY ASSURANCE
GO: GENERAL OBLIGATION MBIA - MBIA INSURANCE
CORPORATION
SEE NOTES TO FINANCIAL STATEMENTS.
6 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NET INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
Investment Income
Interest income . . . . . . . . . . . . . . . . . $2,878,378
--------------
Expenses
Investment advisory fee . . . . . . . . . . . . . 296,024
Transfer agency fees and expenses . . . . . . . . 21,623
Trustees' fees and expenses . . . . . . . . . . . 6,803
Administrative fees . . . . . . . . . . . . . . . 4,004
Custodian fees. . . . . . . . . . . . . . . . . . 14,852
Registration fees . . . . . . . . . . . . . . . . 4,115
Reports to shareholders . . . . . . . . . . . . . 18,262
Professional fees . . . . . . . . . . . . . . . . 1,840
Miscellaneous . . . . . . . . . . . . . . . . . . 6,289
--------------
Total expenses . . . . . . . . . . . . . . . 373,812
Fees paid indirectly . . . . . . . . . . . . (14,852)
--------------
Net expenses. . . . . . . . . . . . . . 358,960
--------------
NET INVESTMENT INCOME . . . . . . . . 2,519,418
--------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- --------------------------------------------------------------------------------
<S> <C>
Net realized gain (loss) on:
Securities. . . . . . . . . . . . . . . . . . . . 278,085
Futures . . . . . . . . . . . . . . . . . . . . (169,750)
--------------
108,335
Change in unrealized appreciation or depreciation. . . 680,995
--------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS . . . . . . . . . 789,330
--------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . $3,308,748
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 7
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income . . . . . . . . . . . . . . . . . . . . . . $2,519,418 $2,987,933
Net realized gain (loss). . . . . . . . . . . . . . . . . . . . . 108,335 641,470
Change in unrealized appreciation or depreciation . . . . . . . . 680,995 (1,491,128)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . 3,308,748 2,138,275
-------------- --------------
Distributions to shareholders from
Net investment income:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . (2,498,801) (2,916,946)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . -- (12,173)
Net realized gain:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . (433,259) (230,374)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . -- --
-------------- --------------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . 2,932,060 (3,159,493)
-------------- --------------
Capital share transactions
Shares sold:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . 6,041,427 5,207,872
Class C shares . . . . . . . . . . . . . . . . . . . . . . . -- 253,726
Reinvestment of distributions:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . 1,536,702 1,422,158
Class C shares . . . . . . . . . . . . . . . . . . . . . . . -- 11,686
Shares redeemed:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . (7,535,048) (16,048,921)
Class C shares . . . . . . . . . . . . . . . . . . . . . . . -- (648,927)
-------------- --------------
Total capital share transactions. . . . . . . . . . . . . . . . . 43,081 (9,802,406)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS. . . . . . . . . . . . . . . . 419,769 (10,823,624)
<CAPTION>
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . 49,774,083 60,597,707
-------------- --------------
End of year (including undistributed net investment income
of $181,139 and $200,009, respectively) . . . . . . . . . . . . . $50,193,852 $49,774,083
-------------- --------------
-------------- --------------
<CAPTION>
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . 374,036 319,474
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . -- 15,797
Reinvestment of distributions:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . 95,114 87,429
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . -- 729
Shares redeemed:
Class A shares. . . . . . . . . . . . . . . . . . . . . . . . . . (465,394) (979,940)
Class C shares. . . . . . . . . . . . . . . . . . . . . . . . . . -- (40,553)
-------------- --------------
Total capital share activity . . . . . . . . . . . . . . . . . . . . . 3,756 (597,064)
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: The Vermont Municipal Portfolio (the "Portfolio"), a series of Calvert
Tax-Free Reserves (the "Fund"), is registered under the Investment Company Act
of 1940 as a nondiversified, open-end management investment company. The
operations of each series are accounted for separately. Shares of the Portfolio
are sold with a maximum front-end sales charge of 3.75%. On October 29, 1996,
all outstanding Class C shares in the Portfolio were converted into an
equivalent value of Class A shares. This transaction was a non-taxable exchange
and no sales charge was applied to the Class A shares issued.
SECURITY VALUATION: Municipal securities are valued utilizing the average of
bid prices or at bid prices based on a matrix system (which considers such
factors as security prices, yields, maturities and ratings) furnished by
dealers through an independent pricing service. Securities (including
options) listed or traded on a national securities exchange are valued at the
last reported sale price. Other securities and assets for which market
quotations are not available or deemed inappropriate are valued in good faith
under the direction of the Board of Trustees.
OPTIONS: The Portfolio may write or purchase option securities. The option
premium is the basis for recognition of unrealized or realized gain or loss
on the option. The cost of securities acquired or the proceeds from
securities sold through the exercise of the option is adjusted by the amount
of the premium. Risks from writing or purchasing option securities arise from
possible illiquidity of the options market and the movement in the value of
the investment or in interest rates. The risk associated with purchasing
options is limited to the premium originally paid.
FUTURES CONTRACTS: The Portfolio may enter into futures contracts agreeing to
buy or sell a financial instrument for a set price at a future date. The
Portfolio maintains securities with a value equal to its obligation under each
contract. Initial margin deposits of either cash or securities are made upon
entering into futures contracts; thereafter, variation margin payments are made
or received daily reflecting the change in market value. Unrealized or realized
gains and losses are recognized based on the change in market value. Risks of
futures contracts arise from the possible illiquidity of the futures markets and
the movement in the value of the investment or in interest rates.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders are recorded by
the Portfolio on ex-dividend date. Dividends from net investment income are paid
monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Portfolio's capital
accounts to reflect income and gains available for distribution under income tax
regulations.
The Fund hereby designates $433,259 as capital gain dividends paid for the
Vermont Portfolio during the taxable year ended December 31, 1997. Of the amount
designated, 100% is taxable at the 28% maximum capital gain rate.
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 9
<PAGE>
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE OFFSET ARRANGEMENTS: The Portfolio has an arrangement with its
custodian bank whereby the custodian's fees are paid indirectly by credits
earned on the Portfolio's cash on deposit with the bank. Such a deposit
arrangement is an alternative to overnight investments.
FEDERAL INCOME TAXES: No provision for federal income or excise tax is required
since the Portfolio intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
NOTE B -- RELATED PARTY TRANSACTIONS
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Trustees of the
Portfolio. For its services, the Advisor receives a monthly fee based on an
annual rate of .60% of the Portfolio's average daily net assets.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Fund for an annual fee. Prior to
August 1, 1997 the Fund paid, monthly, a pro rata portion of a $200,000
annual fee, which was allocated to all of the Portfolios of the Fund based on
their relative net assets. Effective August 1, 1997, the Fund (exclusive of
Money Market portfolios, Class O and Institutional Class) pays monthly an
annual fee of $80,000, which is allocated between the Portfolios based on
their relative net assets.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor and
principal underwriter for the Portfolio. The Distributor received $25,821 as its
portion of commissions charged on sales of the Portfolio.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Portfolio.
Each Trustee who is not affiliated with the Advisor received an annual fee of
$20,500 plus up to $1,500 for each Board and Committee meeting attended.
Trustee's fees are allocated to each of the funds served.
NOTE C -- INVESTMENT ACTIVITY
During the period, purchases and sales of investments, other than short-term,
were $6,812,985 and $8,230,706, respectively.
The cost of investments owned at December 31, 1997 was substantially the same
for federal income tax and financial reporting purposes. Net unrealized
appreciation aggregated $3,128,463, of which $3,138,867 related to appreciated
securities and $10,404 related to depreciated securities.
As a cash management practice, the Portfolio may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
10 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
NOTE D -- LINE OF CREDIT
Effective July 1, 1997, a financing agreement is in place with all Calvert Group
Funds and State Street Bank and Trust Company ("the Bank"). Under the agreement,
the Bank is providing an unsecured line of credit facility, in the aggregate
amount of $50 million ($25 million committed and $25 million uncommitted), to be
accessed by the Funds for temporary or emergency purposes only. Borrowings under
this facility bear interest at the overnight Federal Funds Rate plus .50% per
annum. A commitment fee of .10% per annum will be incurred on the unused portion
of the committed facility which will be allocated to all participating funds.
This fee is paid quarterly in arrears. The Fund had no loans outstanding
pursuant to this Line of credit at December 31, 1997.
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 11
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
YEARS ENDED
------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . $16.33 $16.62 $15.34
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . .82 .88 .87
Net realized and unrealized gain (loss) . . . . . .26 (.25) 1.35
----------- ---------- ----------
Total from investment operations. . . . 1.08 .63 2.22
----------- ---------- ----------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . . (.82) (.85) (.85)
Net realized gains . . . . . . . . . . . . . . . (.14) (.07) (.09)
----------- ---------- ----------
Total distributions . . . . . . . . . . (.96) (.92) (.94)
----------- ---------- ----------
Total increase (decrease) in net asset value . . . . . .12 (.29) 1.28
----------- ---------- ----------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . $16.45 $16.33 $16.62
----------- ---------- ----------
----------- ---------- ----------
Total return * . . . . . . . . . . . . . . . . . . . . 6.90% 3.98% 14.86%
----------- ---------- ----------
----------- ---------- ----------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . . 5.11% 5.27% 5.35%
----------- ---------- ----------
----------- ---------- ----------
Total expenses +. . . . . . . . . . . . . . . . . .76% .77% .76%
----------- ---------- ----------
----------- ---------- ----------
Net expenses. . . . . . . . . . . . . . . . . . . .73% .73% .75%
----------- ---------- ----------
----------- ---------- ----------
Portfolio turnover . . . . . . . . . . . . . . . . . . 14% 24% 12%
----------- ---------- ----------
----------- ---------- ----------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . $50,194 $49,774 $60,203
----------- ---------- ----------
----------- ---------- ----------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . . 3,052 3,048 3,621
----------- ---------- ----------
----------- ---------- ----------
<CAPTION>
YEARS ENDED
--------------------------------
DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . . . . . . . . . $16.66 $15.83
------------ -----------
------------ -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . .87 .86
Net realized and unrealized gain (loss) . . . . . . . . . . . . . (1.35) .82
------------ -----------
Total from investment operations. . . . . . . . . . . . (.48) 1.68
------------ -----------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . . . . . . . . . . (.84) (.85)
Net realized gains. . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ -----------
Total distributions . . . . . . . . . . . . . . . . . . (.84) (.85)
------------ -----------
Total increase (decrease) in net asset value . . . . . . . . . . . . . (1.32) .83
------------ -----------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . . . . . . . . . $15.34 $16.66
------------ -----------
------------ -----------
Total return * . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.88%) 10.84%
------------ -----------
------------ -----------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . . . . . . . . . . 5.47% 5.25%
------------ -----------
------------ -----------
Total expenses +. . . . . . . . . . . . . . . . . . . . . . . . . -- --
------------ -----------
------------ -----------
Net expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .73% .72%
------------ -----------
------------ -----------
Portfolio turnover . . . . . . . . . . . . . . . . . . . . . . . . . . 11% 5%
------------ -----------
------------ -----------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . . . . . . . . . $64,215 $67,634
------------ -----------
------------ -----------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . . . . . . . . . . 4,185 4,060
------------ -----------
------------ -----------
</TABLE>
12 - CTFR VERMONT MUNICIPAL PORTFOLIO ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
------------------------------------------
OCTOBER 29, DECEMBER 31, DECEMBER 31,
CLASS C SHARES 1996 1995 1994(#)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING . . . . . . . . . . . . . . $16.42 $15.26 $16.40
INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . . .45 .58 .51
Net realized and unrealized gain (loss) . . . . . (.39) 1.35 (1.06)
---------- ----------- -----------
Total from investment operations. . . . .06 1.93 (.55)
---------- ----------- -----------
DISTRIBUTIONS FROM
Net investment income . . . . . . . . . . . . . . (.44) (.68) (.59)
Net realized gains. . . . . . . . . . . . . . . . -- (.09) --
---------- ----------- -----------
Total distributions . . . . . . . . . . (.44) (.77) (.59)
---------- ----------- -----------
Total increase (decrease) in net asset value . . . . . (.38) 1.16 (1.14)
---------- ----------- -----------
NET ASSET VALUE, ENDING. . . . . . . . . . . . . . . . $16.04 $16.42 $15.26
---------- ----------- -----------
---------- ----------- -----------
Total return * . . . . . . . . . . . . . . . . . . . . .41% 12.88% (2.94%)
---------- ----------- -----------
---------- ----------- -----------
RATIOS TO AVERAGE NET ASSETS:
Net investment income . . . . . . . . . . . . . . 3.26%(a) 3.61% 3.87%(a)
---------- ----------- -----------
---------- ----------- -----------
Total expenses +. . . . . . . . . . . . . . . . . 2.78%(a) 2.47% --
---------- ----------- -----------
---------- ----------- -----------
Net expenses. . . . . . . . . . . . . . . . . . . 2.74%(a) 2.46% 2.41%(a)
---------- ----------- -----------
---------- ----------- -----------
Expenses reimbursed . . . . . . . . . . . . . . . -- -- 1.85%(a)
---------- ----------- -----------
---------- ----------- -----------
Portfolio turnover . . . . . . . . . . . . . . . . . . 19% 12% 11%
---------- ----------- -----------
---------- ----------- -----------
NET ASSETS, ENDING (IN THOUSANDS). . . . . . . . . . . $432 $394 $223
---------- ----------- -----------
---------- ----------- -----------
Number of shares outstanding,
ending (in thousands) . . . . . . . . . . . . . . 27 24 15
---------- ----------- -----------
---------- ----------- -----------
</TABLE>
(a) ANNUALIZED
* TOTAL RETURN DOES NOT REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
+ EFFECTIVE DECEMBER 31, 1995, THIS RATIO REFLECTS TOTAL EXPENSES BEFORE
REDUCTION FOR FEES PAID INDIRECTLY; SUCH REDUCTIONS ARE INCLUDED IN THE
RATIO OF NET EXPENSES.
(#) FROM MARCH 1, 1994 INCEPTION.
ANNUAL REPORT CTFR VERMONT MUNICIPAL PORTFOLIO - 13
<PAGE>
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THIS REPORT IS INTENDED TO PROVIDE FUND INFORMATION TO SHAREHOLDERS. IT IS
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<PAGE>
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<PAGE>
[GRAPHIC]
DECEMBER 31, 1997
ANNUAL
REPORT
CALVERT TAX-FREE
RESERVES VERMONT
MUNICIPAL PORTFOLIO
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